Raising funds in today’s capital markets can be challenging. IPO (initial public offering) numbers, for example, are falling as promising companies choose to stay private for longer, obtaining funding from the private markets – namely private equity and venture capital – is increasingly difficult too, especially as managers become more selective about participating in deals.
While borrowing becomes more expensive, exchange operators can provide efficient ways, platforms and marketplaces to bring issuers and investors together.
As the panelists discussed, some forward-thinking infrastructures are evaluating the merits of tokenisation – namely the issuance of a digital, divisible security representing an underlying asset – as a tool to enable companies to raise money, and grow their businesses.
Not only can tokenisation be applied to actively traded instruments such as equities, bonds and funds, but it can also be used to securitise illiquid assets like art and wine that market participants can offer their clients.
While tokenisation is still in its early days, there is activity happening in some corners of the market. Art galleries and museums, for example, instead of asking their governments for money every year to keep going, could benefit from tokenising assets that they already have in custody, in order to raise funds from investors and patrons.