Leading investment companies around the world dedicate a significant amount of resources to set ESG targets and to have a positive impact on society.
However, very few have effectively taken steps to make their investment products more accessible and transparent.
Blockchain infrastructure can be a key component to reducing inequality worldwide by making financial securities accessible to anyone with a smartphone and a free crypto wallet. Thanks to the internet, most people in the world have access to more information than the most powerful individuals did a few decades ago. Blockchain technology has the potential to achieve the same result for investments.
What better way for an investment company to show that they are serious about ESG than to tokenize their products? This would not only increase access at the capital raise level, but also subsequently. Let’s take Apple as an example. Today, millions of people are shareholders in Apple. Many have benefited from the company’s value creation. Does this mean they have all invested pre-IPO? No! The existence of the stock market democratized access. Blockchain technology will enable society to achieve even better results for all types of investments – whether public or private – via crypto wallets, cryptocurrency (incl. stablecoins), tokenization platforms and peer-to-peer exchanges. The social benefits of such a system are massive.
Imagine a world where someone in Argentina can purchase $100 worth of Indonesian Commercial Real Estate in a few seconds on their smartphone, to protect their savings. A few years later, let’s say they need to pay for something. They could then easily sell their security tokens against stablecoins and use those as a means of payment.
Furthermore, companies using smart contracts as a governance tool to control corporate actions can provide more transparency than ever before. Vote counts can be visible on-chain. So can the allocation of investor funds or the cap table. This is a powerful tool for stakeholders, auditors and regulators to fight corruption and financial crimes.
At DigiShares, we are extremely excited about this future of increased democratization and transparency in financial markets. We aim to provide the technological tools to companies offering investments in real world assets to make it a reality.