One of the most interesting and exciting aspects of the blockchain industry is finding gem projects and getting there before the masses. Today, I’ll talk about a project which I believe has a great future (I mean, really great!) in the blockchain world and has the potential to be a breakout project of the future.
***Disclaimer – this is my own opinion and not financial advice. Investing in cryptocurrencies and blockchain-based small caps is high risk and should be taken on at one’s own risk. There are affiliate links within this post to which I may get a commission if you click through and use the service***
So what’s the deal.. what project is the best kept secret in the Crypto Industry?
One project that has caught my eye is CoinMetro which is a cryptocurrency exchange (and, in fact, a lot more). For a full CoinMetro review check out our Medium post. Although it’s a fine example of a digital asset exchange, this isn’t the reason why I have been investing in the project since it’s initial fundraising stages. It’s actually attempting to do something unique. Something that if it comes off will open the door to a huge global marketplace. More on this later!
CoinMetro is a platform to exchange and trade digital assets. A platform to earn, spend and accumulate digital wealth.
This is all really cool, but why should we care? What make’s it different? Why should we take a deeper dive into a cryptocurrency exchange when exchange only platforms are struggling to survive in the post bull cryptocurrency market?
There’s one huge difference between CoinMetro and all the other exchanges and that’s a Central Securities Depositary (CSD).
Hold up what’s a Central Securities Depository!
There’s going to be some key technical terms in this section so first let’s break it down before we begin:
CSD – Central Securities Depository
A financial organization that provides post-trade settlement of securities. The CSD guarantees that the buyer receives the purchased assets and the seller receives the promised payment.
MTF – Multilateral Trading Facility
It facilitates the matching of orders, effectively giving a platform for buyers and sellers of financial instruments to transact between themselves – it’s a license that is required to offer trading in transferable securities.
STO – Security Token Offering
A process by which an investor exchanges money for tokens representing their investment. However, unlike ICOs, STO’s only distribute security tokens that represent regulated assets such as stocks, bonds, real estate investment trusts or other funds.
To act as a fully compliant venue of an STO sale, a marketplace first needs an MTF license. In addition, settlement needs to take place and this should be done in real-time, if not, why are we even tokenizing these assets in the first place?
This is particularly important in the EU as the CSDR requires executing the settlement at a CSD.
A framework that enables experimenting with innovative financial solutions in a controlled environment. It essentially allows testing a regulated product, without being regulated.
Ok, there’s the key technical terms we need to know so what’s CoinMetro embarking on in this area.
What does this mean for CoinMetro?
CoinMetro has been working on the creation of a regulatory sandbox in Montenegro. This sandbox will allow it to trade regulated tokenized assets under a similar structure to an MTF in Europe.
If that’s not exciting enough, development has also begun on a Distributed Ledger Technology (DLT) based CSD that will provide real-time post-trade settlement services to connected MTFs like CoinMetro. Together these two important pieces form a complete tokenized capital market infrastructure.
While the CSD project is not a CoinMetro brand, CoinMetro will see a clear and direct benefit from its inclusion into the project.
To create a liquid STO market, post-trade operations are essential.
Most other businesses looking to create liquidity in this non-existent market are doing so via primary offerings to a select group of investors. These investors all reside in select regions of the world. They are essentially recreating the current capital market structure and limiting access even more.
Helping the CSD to create the underlying post-trade infrastructure means that CoinMetro can not only create and participate in a more robust primary market but that they can also create and participate in a liquid secondary market.
This is key to breaking down barriers and allowing access to a far larger portion of the world’s population into what will be a massive trillion-dollar market.
This means CoinMetro would have access to all tokenized securities that get listed on regional CSDs. All assets would be listed on the CoinMetro exchange and CoinMetro would become one of the liquidity hubs, and initially the only hub, in Europe.
CoinMetro is required to generate traction for the CSD. The two will operate in synergy and growth of the CSD also means growth for CoinMetro.
What does the future hold?
CoinMetro is looking to create the world’s first complete capital market infrastructure for natively tokenized assets that is open to retail investors worldwide with real-time cross border settlement.
In this scenario, CoinMetro would become the primary market in Europe. Therefore any other exchange that wants to operate in Europe (with assets issued both within and outside of Europe) and sell to European clients, would have to pull liquidity from CoinMetro.
The CSD will handle all settlement of regulated assets, thus CoinMetro will become a non-custodial exchange for tokenized securities.
The CSD will accept deposits of both assets and ‘cash’, i.e. stablecoins, and, based on CoinMetro’s real-time instructions, settle those assets between clients.
This enables CoinMetro to offer more services and exposes CoinMetro to an enormous amount of clientele.
Once the ecosystem has been established, CoinMetro would become a critical player in the tokenized security world.
What’s the best kept secret in the blockchain industry – final thoughts
This is why I believe CoinMetro is one of the best-kept secrets in the crypto industry currently. I, for one, will be in on the ride… will you? If you’d like to check out CoinMetro, feel free to visit their site below: