Companies on the Australian Stock Exchange (ASX) could trade tokenized bonds, shares, funds or carbon credits after a successful proof of concept led by digital asset investment platform Zerocap.
On Monday, Melbourne-based digital asset investment platform Zerocap told Cointelegraph that it had successfully used Synfini to attach its custody infrastructure to the platform as part of a trial program, enabling trading and the compensation of tokenized assets based on Ethereum.
The test is part of ASX’s distributed ledger technology (DLT)-based settlement project Synfini, which launched in November. The platform offers clients access to ASX’s DLT infrastructure, data hosting and accounting services, allowing them to build blockchain applications from it.
Zerocap co-founder and CEO Ryan McCall said it happened last year and “got a lot of interest” in the institutional arena, particularly from companies that are exploring ways to tokenize and trade carbon bonds, funds or credits.
“Thinking beyond Bitcoin, Ethereum and other crypto assets, the tokenization of bonds, stocks, property, carbon credits, private equity and anything that is essentially illiquid, here is a strong value proposition that we can tokenize anything active and connect it with the ASX ecosystem.”
McCall noted that companies dealing in particularly “opaque and difficult to access” markets, such as bonds and carbon credits, are looking for ways to cut costs efficiently, save time on issuance and open up more investment access. broad through tokenized offerings.
When asked if the ASX could offer cryptocurrency trading through Synfini, McCall said “yes,” but that he hasn’t seen any indicators of interest in this field, as the ASX and others are primarily focused on traditional tokenization/ from the real world. active.
However, it is worth noting that Synfini is a separate initiative from ASX’s blockchain-based CHESS system replacement that has yet to be implemented after facing years of technical issues.
McCall went on to suggest that Zerocap may be looking to officially launch tokenization of commercial assets and services through Synfini to institutions in the near future, as it has just passed the necessary steps for legal approval.
“Since then, we’ve been through the certification process to get into the production environment, which, as you can probably imagine, for any kind of enterprise software, but certainly for an exchange, is a pretty strict process. So we just passed the production certification. So get ready to implement this now,” he said.
McCall also highlighted that since ASX is a trusted source for hosting digital asset trading, doing so would likely lessen institutional concern about counterparty risk related to the crypto sector.
Such risks have been all too prevalent this year as several major crypto firms face liquidity problems or file for bankruptcy in the case of Celsius, Voyager Digital, and Three Arrows Capital.
“So counterparty risk, you know, credit risk specifically, I guess is the biggest talking point in crypto right now with the 3AC debacle. And I think that just shows the use case for what ASX is trying to do here.”
“You know, thinking about the ecosystem and the investor protections and everything that it offers, there is definitely a need for something like that in digital assets,” he added.
Zerocap’s CEO also suggested that Synfini will likely be used by a wide range of companies, as the platform is easy to use and removes a lot of variables for companies.
“If a custodian or a fund manager or any application developer wants to come in and build a blockchain application, they can do it on this Synfini platform without really having to worry about managing the infrastructure, which is great,” he said.
Related: ASIC President Concerned About Large Number Of Crypto Investors “Risk Taking”
Zerocap recently participated in a tokenized carbon credit transaction in late June, with the firm providing liquidity and market making services for a swap between major Australian family office Victor Smorgon Group and BetaCarbon, a carbon trading platform based on blockchain.
The deal was also facilitated through A$DC, a fully AUD-collateralized stablecoin developed by Australian “big four” bank ANZ.