AlphaPoint Debuts Regulated Asset Backed Token05.14.2018 By Rob Daly Editor-at-Large
Major asset classes – from commodities like gold to exclusive goods like art – account for a combined investment opportunity of over $11 trillion. The opportunity to digitize these assets is projected to reach $308 billion by 2019. AlphaPoint, the global financial technology company that helps institutions make illiquid assets liquid with blockchain technology, today announced the Regulated Asset Backed TokenTM (RABT) framework to unlock the benefits hidden in illiquid classes, enable new deal types, and dramatically improve liquidity and overall value of assets.
Muirfield Investment Partners, the Boston-based private equity real estate investment firm, is familiar with the opacity and illiquidity in the private equity real estate space. By partnering with AlphaPoint, Muirfield will offer investors a new way to invest in and gain exposure to U.S. real estate. The token will be accessible to accredited investors under Regulation D of the Securities Act and to foreign investors under Regulation S of the Securities Act and is expected to be available for investment later this year.
“AlphaPoint’s technology is enabling Muirfield to launch a new generation of private equity real estate investment vehicles – one that addresses the well known structural issues related to current private equity funds,” said Thomas J. Zaccagnino, Muirfield’s Founder. “By tokenizing a real estate investment vehicle, investors are for the first time, able to freely trade their ownership on regulated secondary exchanges. As a result of this liquidity, Muirfield is now able to offer investors a superior private equity investment structure; one that is more liquid, appropriately structured, and improves alignments between investors and managers.”
RABT is a compliant tokenization framework for creating self-regulating, compliant tokens backed by real assets. AlphaPoint’s Asset Digitization platform already gives institutions and organizations the ability to digitize any asset. RABT takes it a step further by combining the benefits of public networks with regulatory controls to enable specific asset classes including private shares, commodities, debt, securitized assets and exclusive goods to become digitized.
- Unlocking Benefits of Illiquid Assets: Improvements in liquidity, transfer and settlement time, and compliance overhead will enable investors and issuers to unlock benefits hidden in illiquid classes as well as enable new types.
- Compliance Follows the Asset: The RABT framework allows for compliance rules that enforce themselves via Blockchain technology; effectively enabling self-regulating assets that follow compliance rules at the protocol level. Only approved investors can hold RABT tokens and issuers can enforce restrictions across primary offerings and secondary markets – including both peer-to-peer transfers and exchange – as well as enforce holding periods and complex rule-based transfer restrictions.
- Benefits to Issuers: The added benefits to digitizing illiquid assets via the RABT framework offers issuers the ability access new markets, dramatically reduce the burden of regulations and management complexity, and improved record keeping via distributed ledger technology.
- Benefits to Investors: Investors will have the opportunity to access previously opaque markets as well as improved liquidity with the ease of finding buyers and sellers, streamlined settlement and smaller incremental transaction sizes.
“We are on the cusp of the next great wave of blockchain technology: tokenized securities,” said Salil Donde, AlphaPoint Chief Executive Officer. “Securitization of assets is about bringing benefits of the blockchain, benefits of tokenizing real-world assets and creating massive opportunities by creating a marketplace to dramatically improve liquidity and the overall value of assets.”
A live demo of RABT will be exhibited at AlphaPoint’s booth at Consensus 2018.
23% of buy side is investing in digital securities and tokens.
Japan Exchange Group has started looking into raising funds through issuing security tokens.
Regulated institutions can use the new protocol to create tokens for their customers.
Forge, Societe Generale’s digital assets arm issued digital covered bonds and structured products.
Clearstream and Northern Trust will also participate.