In its latest press release, the Canadian Securities Exchange (CSE) has announced the formation of a securities clearing and settlement platform based on the Ethereum Blockchain, with a prime function of allowing companies to raise capital with security tokens.
Imitating the initial coin offering model, the CSE has created its own revised version referred to as the Security Token Offering (STO).
“Improvement on Current ICO Model”
It is intended for STOs to be a fund raising route open to both new and established companies. The CSE claims that the STO will represent an improvement on current ICOs as they will be subject to ‘full regulation by applicable securities commissions.’
Additional benefits are said to include reduction of investor risk due to ‘significant oversight’ and ‘regulated review protocols for STOs’ both prior to acceptance for trading and once listed.
The CSE’s Chief Executive Officer, Richard Carleton, said “Our platform represents an intersection between blockchain and the capital markets that delivers on blockchain’s promise to disrupt conventional transaction and record-keeping mechanisms, thereby providing tangible benefits for market stakeholders.”
Kabuni Technologies Inc., a private company based in Vancouver, are expected to be the first company to issue an STO after filing for permission to do so with the British Columbia Securities Commission.
