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As of August 7th 2019, Globex, the Antigua and Barbuda Ministry of Finance and Corporate Governance (MFCG), and Julius Capital Bank, have signed a Memorandum of Understanding (MOU). The agreement aims to leverage the Ethereum blockchain in making Antigua a global hub for security token issuance and secondary market trading.
MOU Between Antigua and Globex Explained
The newly signed MOU features three ‘critical’ components that are necessary for a healthy security token ecosystem.
The MOU entails support from the MFCG through the establishment of a regulatory framework which protects investors, ensures financial regulatory transparency, and “maintains national market integrity”.
A Dollarized Security Token Exchange
Globex has developed a dollarized secondary trading solution. It features security token trading-pairs which are priced only against fiat. This allows investors to trade, deposit, and withdraw funds in fiat through a government bank. Ultimately, this minimizes the risk of price fluctuations by avoiding the high levels of volatility seen in cryptocurrencies.
The Integration of a Licensed Financial Institution
Through the Julius Capital Bank, the MOU includes a licensed financial institution to provide accessible fiat banking for traders. To date, most traditional banks refuse to transact with cryptocurrencies and blockchain-based assets in general, making the integration of such banks a difficult feat.
Gaston Browne, Prime Minister of Antigua and Barbuda, says,
“The Antiguan government strongly supports public blockchain technology and believes in the positive impact it will have on how the world trades securities. We are thrilled to become a trusted hub for international issuers, investors and market participants to seamlessly and securely conduct affordable digital securities offerings and offer transparent secondary trading in an internationally compliant and regulated manner. We also believe this technology will pave the way to frictionless blockchain real estate investment services for a global investor base, giving investors access to the lucrative opportunities that our beautiful twin-island state has to offer.”
Globex CEO Brian Collins also provided commentary on the announcement:
“The new age of securities is here, and we are honored that our technology solutions have been selected to power this incredible operation. We believe that having the Ethereum public blockchain integrated with our suite of tokenization, KYC/AML, custody and on-chain trading solutions will encourage market adoption and fuel market growth.”
Globex has also been selected by the Timeless Luxury Group to power its own Security Token Offering.
What do you think of the MOU signed by Globex, Julius Capital Bank, and the MFCG? We want to know your thoughts in the comments section below.
Image courtesy of Government of Antigua and Barbuda.