As part of their annual meeting, the World Economic Forum published an article on their website making the case that digital securities could help account for the multi-trillion dollar funding gap for the world’s future infrastructural needs.
Peter Lyons of Atomic Capital just recently penned an article that was recently published as part of the World Economic Forum Annual Meeting on why digital securities could prove to be instrumental in meeting the future’s infrastructural funding challenges. With the number of people living in urban slums “expected to triple, reaching three billion,” we are facing a currently insurmountable crisis.
According to reports, to meet the growing demands of our expanding global populations we need an estimated “$97 trillion of infrastructure investment… from today through 2040.” The problem is that total funding is expected to fall $18 trillion short, a number that is slightly larger than even the entire current annual GDP of China.
The Promise of Digital Securities
With the help of programmatically-enforced compliance, digital securities can provide liquidity and instant settlements to a global market for infrastructure that is in desperate need of investment. As Lyons writes:
“This is important because greenfield infrastructure projects do not generate revenue and the highest face risk of delay during planning and construction. Digital securities provide a means for investors willing to enter early-stage greenfield projects, potentially capturing higher returns while tolerating higher risk.”
In short, digital securities broaden the pool of investors globally. Now, SEC-regulated trading systems like TZero and OpenFinance are significantly lowering the barriers to entry, potentially opening the floodgates to trillions of dollars of new investments.
In the long term, as Lyons writes, “distributed ledger technology allows us to reimagine how capital can work” and could potentially prevent a future “cascade of destabilization throughout the global system” by interconnecting disparate markets.
Although digital securities have a long ways off from being utilized by major parties on the world markets, the trust that is currently building among the first-movers of this exciting new sector may prove to be the harbingers of a new model of capital—and, in time, a new model of investing into the livelihood of the billions who will be moving into the urban spaces of tomorrow.
You can read Peter Lyons’s full article here.
What do you think Do you agree that digital securities could help meet these fundraising demands of the future? Let us know your thoughts in the comments.
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