Amid a whirlwind of controversy surrounding cryptocurrency regulations, the Singapore Exchange has given crypto users some breathing space. The Singapore Exchange (SGX) has recently launched a new trading platform for crypto. This will bring Ethereum to the Singapore Exchange (SGX).
The Singapore Exchange (SGX) is the country’s public stock market. It has recently launched the trading of security tokens based on the Ethereum Blockchain technology. The technical aspects of the platform will be handled by the Ethereum Startup ConsenSys. They have helped 1X bring Ethereum to the Singapore Exchange (SGX).
The platform will be provided via 1X, a leading private corporation in Singapore. According to the website they are – “an investee of Singapore Exchange, a global leader and one of Asia’s most international exchanges and currently holds a Recognized Market Operator license under the Monetary Authority of Singapore.”
1X – The Platform
1X is headquartered in Singapore, the fintech hub of Asia. It takes advantage of the fact of Singapore’s well-recognized and trusted regulatory environment allows it to pioneer changes in the financial market. 1X was co-designed with leading capital market regulatory experts and financial regulators.
The current cryptocurrency platform was built with assistance from ConsenSys, a New York-based blockchain software studio started by ethereum co-founder Joseph Lubin. It was based on the ERC-20 token but modified to comply with the regulations and requirements of the Singapore Exchange.
The token is built on the ERC-20 design and it will be seen on the Ethereum Network. However, it has a few changes that are necessary to be used in the Singapore Exchanges.
“It does not give custody of the assets directly to users, as the trading of shares on 1X is subject to a number of compliance checks.”Daren Frankel, director of ConsenSys’ Singapore operations
The Ethereum token and its securities are required to be stored completely by a third party. This third party must be a licensed entity that is regulated by the Singapore government. The token currently is stored with Equiom Trust Singapore but new custodians are slated to be added in the future.
“When we designed this, we designed it to be a fully compliant, scalable and standardized way to onboard global companies and investors,” Choo said, “because the assets we are offering are securities, which are the most highly regulated asset class.”
The 1X platform was made public and went live on 10th July 2019. A Singapore fund manager, Aggregate Asset Management (AAM), has played a major role in bringing this about. The Ethereum token modified for the platform represents about 7 percent of the shares of the fund. They raised $4 million since May 4th 2019. They investment in dollars were returned in ethereum to the investors.
The main purpose of putting Ethereum on Singapore Exchange (SGX) via the 1X platform is to enable companies to raise capital and investment using blockchain as an infrastructural platform.
“We take a portion of private companies – usually 10 to 30 percent – and put that into a special purpose vehicle (SPV) … to back every token we mint for listing and trading. The overall idea is to bring liquidity to an otherwise historically illiquid assets. We are starting off with private companies. In the future, we intend to apply the same workflow to other illiquid assets like bonds or real estate, etc.”Haiping Choo, CEO, 1X
Find the full press release here.