Following a successful proof-of-concept experiment sponsored by the digital asset investment platform Zerocap, companies listed on the Australian Securities Exchange (ASX) may soon be able to trade tokenized assets, equities, funds, or carbon credits.
“There’s a strong value proposition here that we can essentially tokenize any asset and bridge that into the ASX ecosystem,” said Zerocap CEO Ryan McCall.
The trading and clearing of Ethereum-based tokenized assets are now possible, according to Melbourne-based digital asset investment platform Zerocap. It said on Monday that it has successfully deployed Synfini to bridge over its custody infrastructure onto the platform as part of a trial program.
The pilot is a component of ASX’s Synfini DLT-based settlement project, which was introduced in November. The platform enables users to create blockchain applications by giving them access to ASX’s DLT infrastructure, data hosting, and ledger services.
It happened last year, according to Ryan McCall, co-founder, and CEO of Zerocap. “It garnered a lot of interest” in the institutional sector, notably from businesses looking into ways to tokenize and exchange bonds, funds, or carbon credits.
“Thinking beyond Bitcoin, Ethereum and other crypto assets, the tokenization of bonds, equities, property, carbon credits, private equity, and anything that’s essentially illiquid, there’s a strong value proposition here that we can essentially tokenize any asset and bridge that into the ASX ecosystem.”
According to McCall, businesses dealing with particularly “opaque and difficult to access markets” like bonds and carbon credits are looking for effective ways to reduce costs, shorten the issuing process, and broaden investor access via tokenized offerings.
When asked if the ASX will be able to offer cryptocurrency trading through Synfini, McCall replied “absolutely,” but he added that he hasn’t noticed any signs of interest in this area because the ASX and others are largely focused on tokenizing traditional/real-world assets.
However, it should be noted that Synfini is a different project from ASX’s blockchain-based CHESS system replacement, which has not been put into use due to years of technical difficulties.
McCall went on to say that since Zerocap has recently completed the requirements for legal approval, it may soon be planning to officially introduce asset tokenization and trading services via Synfini to institutions.
“Since then we’ve been going through the certification process to get into the production environment, which as you can probably imagine, for any sort of enterprise software, but certainly for an exchange, it’s a fairly stringent process. So we’ve just cleared the production certification. So getting ready to deploy this now,” he said.
McCall also said that using the ASX, a renowned venue for hosting digital asset trading, will probably allay institutional worries about counterparty risk related to the cryptocurrency industry.
These dangers have become quite common this year as a result of several significant crypto enterprises either having liquidity problems or going out of business entirely, as was the case with Celsius, Voyager Digital, and Three Arrows Capital.
“So counterparty risk, you know, credit risk specifically I guess is the biggest talking point in crypto at the moment with the 3AC disaster. And I think that just demonstrates the use case for what the ASX is trying to do here.”
“You know, thinking about the ecosystem and investor protections and all the things that it offers, there’s definitely a need for something like that in digital assets,” he added.
The CEO of Zerocap added that a variety of enterprises are likely to adopt Synfini because the platform is user-friendly and takes many variables out of the equation for businesses.
“If a custodian or a fund manager or any application developer wants to come and build a blockchain application, they can do that on this Synfini platform without having to really worry about managing any of the infrastructure, which is pretty cool,” he said.
Late in June, Zerocap participated in a tokenized carbon credit exchange, offering market-making services and liquidity for trade between the significant Australian family office Victor Smorgon Group and the blockchain-based carbon trading platform BetaCarbon.
A$DC, a stablecoin created by “big four bank” Australian bank ANZ that is entirely AUD collateralized, was also used to effectuate the transaction.
