Is the future of securities trading on the blockchain?

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By Vanessa Malone

If you’re a regular on our weekly blog, you’ll know that Horizon’s vision is to deliver our blockchain issuance, compliance, and trading software to regulated entities around the world in order to power a global network of digital securities exchanges.

We, like many others, believe that blockchain technology is at the forefront of revolutionary change in fintech; and proof of concepts come out every day for how it can better today’s capital markets.

Within this realm, we think one of the biggest areas of disruption is on how the world currently issues, trades, and settles securities.

This is why we launched our Open Order Book trading software which integrates with our compliance and custody tools, as well as a user-friendly retail trading app to equip regulated entities with the tools needed to launch full blockchain-based ecosystems.

Here’s how we see it. In order for digital securities to become the gold standard of securities issuance — perhaps even replace traditional securities down the line — secondary trading needs to not only be addressed, but it has to offer issuers and investors a user-friendly and understandable upgrade of current trading systems.

As no liquid trading venue for digital securities exists today, we are thrilled to introduce the community to what we believe to be a viable solution that could help drive the blockchain evolution in the secondary market.

In 2019, the digital market capitalization represented just 0.4% of the $79 trillion dollar global equities market.*

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The blockchain digitization of the next generation of real-world equities is forecast to grow to over $2 trillion dollars by 2030.**

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We believe these statistics point to a market ripe for disruption.

In addition to the lack of liquidity, the majority of blockchain-based security trading venues today are centralized, private or off-chain, which we feel takes away from the true power that operating on a public blockchain can offer. A recent blog of ours discusses why we believe these centralized exchanges are just a stepping stone to decentralized exchanges.

Centralized exchanges also can suffer from wash trades, “fake” trade volume, iceberg orders, and other market manipulations.

This is another reason why our company is working to deliver blockchain solutions to regulated trading venues around the world. And luckily, tangible steps have been made to execute our vision.

We have a signed license and operating agreement with a U.S. broker dealer working to build an SEC-registered ATS. In addition, Horizon has signed license and operating agreements with regulated entities in Brazil and Australia, and an MOU with the Antigua and Barbuda Ministry of Finance & Corporate Governance to build secondary trading venues for digital securities using Horizon’s fintech solutions.

We believe issuers and investors have a lot to look forward to on these Ethereum-trading venues powered by Horizon. Open Order Book exchanges have anti-market manipulation programmed into the trading software. This means no hidden fees, wash trades, inaccurate volumes, or other common manipulations. This aims to create transparent orderbooks and accurate marketplaces while leveling the playing field for the everyday investor.

So back to our proposed question — is the future of securities on the blockchain? We think with all of the perks blockchain-securities have, that it’s going to happen. The next question is when, which is why we’re working to speed up this process with our blockchain software solutions. On that note, stay tuned for an exciting announcement Monday. What do you think about blockchain technology’s role in capital markets?

To learn more about Horizon’s one-stop-shop for digital securities, please visit https://horizon-globex.com.

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Horizon offers a suite of integrated securities software applications for compliant issuance through secondary trading of electronic securities.

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