ICO Project Polymath Is Trying to Buy a Stake In a Real Stock Exchange
If one announcement summarizes the ambitions of crypto project Polymath, it might be Wednesday’s acquisition of the domain Tokens.com.
One of its several this week, it cuts to the heart of the project’s aims to dominate the issuance of tokenized securities. But the plans go beyond just the acquisition of potentially popular domain names.
In the run-up to the company’s Wednesday morning appearance at CoinDesk’s Consensus conference, Polymath also revealed it’s in the process of closing a deal to acquire a large stake in the Barbados Stock Exchange and that it’s working on a deal with the alternative trading system tZero.
With those two partnerships, it believes it will have the platform to create tokens that can actually trade and dominate the coming transition of traditional equity to crypto. Neither deal is done, but Polymath CEO Trevor Koverko projects that they should be closed by early June.
Koverko sees a crisis of liquidity in security tokens. As CoinDesk previously reported, many of the tokens issued so far are under a lockup period required by U.S. securities regulations, but Koverko argues that’s not the whole story.
“It’s also because everyone’s scared to release them in the wild because you can’t prevent unaccredited people from getting them,” Koverko told CoinDesk. “What we’re doing is we’re bringing a measure of restraint and typical Wall Street-like compliance.”
Polymath is one of several companies that have jumped into the token issuing space. The firm describes itself as a platform, one that brings in companies and guides them through the process of issuing a security token. The companies with the strongest proposals will get access to elite consultants, legal counsel and possible investment from Polymath’s new security token fund, which it also announced this week.
One of Polymath’s partners, Gabriel Abed, founder of Bitt, a Caribbean platform for mobile money, explained the value of a crypto exchange in the country. “Barbados has the most double tax treaty agreements in the world.”
That means that if a company pays tax in one country, it doesn’t have to pay tax in the other.
Bitt is in the family of companies, like tZero, that have investments from Patrick Byrne and Overstock.com. Abed is working to negotiate the use of TZero’s backend to run a crypto specific exchange out of the Barbados Stock Exchange.
Once the exchange is running, it will be a ready place for new tokens to trade, with guarantees built into the ST20 platform that no one will be able to hold them that shouldn’t. Koverko anticipates equity and real estate to begin quickly moving onto the platform. He also sees opportunities for people in the developing world with capital but without local financial infrastructure to make investments.
Just as Africa skipped the landline phase and went straight to mobile, Koverko envisions a mobile-based capital market there as well.
The Barbados Stock Exchange and tZero had not confirmed the deals in process at press time.