The world of traditional finance offers security, insurance, and a proven system for investors and traders to participate and grow their wealth. Traditional financial markets are centralized, with only a few key players being influential such as the New York Stock Exchange (NYSE), NASDAQ, and London Stock Exchange, and mostly in the West, such as the United States. Can decentralization cause a “seismic shift” in power away from these traditional centralized platforms?
Getting listed on the traditional capital markets, especially in the U.S., has been very popular for international companies, especially those from China for the past decades. For Chinese companies, listing in the U.S. capital markets is a good opportunity to raise capital and gain exposure, because of the maturity of said capital markets. The main reasons why these companies go to the U.S. involve seeking a smooth listing path, higher market valuation, and broader visibility in the capital market. For years, Aaron Tsai’s MAS Capital has been the go to advisory firm in Asia to make these reverse mergers happen. Particularly because the U.S market is global and has the most abundant capital for investors from all over the world market.
Is decentralized finance causing the “seismic shift”?
The economic cycle typically begins in the West and is transmitted to countries on the perimeter through changes in interest rates, capital flows, trade, and investment. The United States and its traditional allies in Western Europe are the active members of this system, while emerging markets on the outer edge play a role that is mostly passive and reactive.
Global economic activity was focused on the United States and Western Europe. However, Asia’s economies, especially China, have grown much faster than their Western counterparts, pulling the center of the financial gravity steadily deeper into the eastern hemisphere of the world. Once again ranked as the world’s largest IPO exchange in terms of IPO proceeds, Hong Kong stock exchange had 144 IPOs listed on the Main Board raising US$40 billion in 2019, beating Nasdaq with 185 IPOs, raising $34.3 billion.
China has the largest internet financial market. The country’s rapid urbanization, industrialization, and emerging middle class have been the principal drivers of world economic growth in recent years. According to the World Economic Outlook, this Asian country accounted for 28% of all growth worldwide in the five years from 2013 to 2018, more than twice the share of the United States.
China’s mobile Internet growth in the Web 2.0 era leap-frogged the U.S. in certain areas, such as mobile payment and multi-functional social media applications, WeChat. Technologies like AI, Big Data, IoT, 5G and the Blockchain will continue to fuel growth, especially in the Greater Bay Area, due to the combination of IT technologies developed in core cities like Shenzhen and financial related blockchain applications developed in Hong Kong.
As the world’s economic center shifts back to the East from the West, new and dynamic players will lead the way. A host of financial institutions will emerge throughout Asia, due to the size and growth of the market, rapid application of blockchain and AI technologies combined with looser regulations enable their access to world markets via the Internet, which will cause a “seismic shift” from centralized financial markets to decentralized financial markets.
Decentralized finance (DeFi) makes it possible for issuers to create financial instruments capable of operating digital assets with fewer limitations. Tokenization of pretty much everything from equity and debt securities to estate offerings are now a reality. The fact that blockchain technologies are accessible and transparent can make the issuance of securities, repayments, and loan terms more frictionless among the numerous participants involved.
MASEx and security tokens are innovating the financial industry
Security tokens that tokenize tangible and intangible assets, such as corporate equity and debt, will transform capital raising via Security Token Offering (STO). Investing in projects and secondary trading of security tokens will break-down the jurisdictional barrier on a global basis. The utilization of crypto tokens for the trading of securities is an innovative approach. This revolutionizes the financial industry, with the ease of token transfer globally, 24/7 trading of security tokens on exchanges, and T+0 settlement or transfer of the security tokens.
MASEx, founded by Aaron Tsai, is a global asset exchange designed to trade all asset classes, both tangible and intangible, such as securities, real estate, commodities, FOREX, and digital assets. It has the world’s most advanced cross-chain technology. Tokens on different public chains can be paired for trading, such as BTC with ETH, and tokens will transfer directly from the seller’s wallet to the buyer’s wallet on chain, in a decentralized environment. In addition with cross-chain technology, BTC, USDT, and ETH transfers can be completed at lightning speed. The technological infrastructure is necessary to realize the “seismic shift” is made possible with advancements in platforms like MASEx.
Accelerating the global market with decentralization
The existing financial system deprives millions of people, especially half of the world’s unbanked population, of essential financial services because of barriers such as location, wealth, and status. Decentralization through Security Token Offerings allows companies to raise funds without the need to get listed in the traditional or the U.S. capital markets. It has also proven successful in the real estate industry, allowing investors around the world to buy a piece of commercial property in New York City, for example, without leaving his or her country and buy or sell simply by initiating a trade on the exchange.
Not only that, but the adoption of security tokens and the spread of crypto blockchain-based financial services would also shape a new world of decentralized finance. This leads to more extensive global accessibility to financial services, safer transactions, and lower transaction costs – breaking past previous technological and jurisdictional limitations in the financial markets.