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From stock exchanges to asset exchanges
In the digital assets universe, a security token is more than a currency — it often represents ownership of an underlying real-world asset. Indeed, the SEC hearings have changed the future of how cryptocurrencies work through more stringent regulations. Unlike ICOs — which collapsed during the 2017 craze — STOs — which stands for Security Token Offerings — are actual financial securities and thus backed by something tangible like the assets, profits or revenue of a company or an asset. In the coming years, we are likely to see a significant rise in the number of STOs. Indeed, while institutional investors have consistently stayed away from cryptocurrencies and ICOs in the past, the reasoning they used in keeping such a distance (aka we do not invest in unregulated securities) does not apply to security tokens. One of the most promising features of security tokens and STOs is their ability to offer tokens as a digital representation of shares of a company's stock. In addition to the tokenisation of company shares, real goods and assets can stand behind the tokens. In the future, the widespread tokenisation of real assets could become a new trend. One of the most promising markets for tokenisation is real estate. Tokenisation of a residential house will give people the opportunity to become its owners and conduct voting on digital platforms, making decisions based on the share of each of the voters in the house. In our opinion, tokenisation will thus enable the democratisation of capital markets. It will also make the market more efficient. And finally, tokenisation will open up trillions of dollars in liquidity. In short, tokenised securities are bridging the gap between traditional (financial and real) assets and crypto markets because they are aligned with everyone's interest. And this will be hugely disruptive.
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Charles-Henry Monchau joined Bank Syz as CIO in October 2021. Prior to joining the bank, he held senior positions with Dubai Investments (CIO), Deutsche Bank (Head of Asset Allocation in Europe and Middle East), EFG Bank (CIO Europe), Rothschild Bank AG, Lombard Odier and BNP Paribas. He also played a key role in the launch of a digital bank in Switzerland in 2020–1. Charles-Henry holds an Executive MBA from Instituto de Empresa and an MSc in Finance from HEC Geneva. He is also a CFA, CMT, CAIA and CIIA charter holder.
Valérie Noel is the Head of Trading (all asset classes) at Banque Syz. She brings an in-depth knowledge of the international finance sector. She gained extensive experience in asset management as Head Trader for SYZ Asset Management for over a decade. Her other accomplishments include managing multiple IT migrations and the digitalisation of the group. She returned to Bank Syz as Head of Trading Desk after a short but instructive experience as Head of Market in a digital institution. Prior to joining the bank, she was head of US equity trading at HSBC Private Bank in Geneva. She started her career in 1994 at United Overseas Bank and then spent a few years at Crédit Commercial de France. She also had the opportunity to deepen her knowledge at Salomon Smith Barney in Geneva and New York during her 28-year career.
CitationMonchau, Charles-Henry and Noel, Valérie (2022, December 1). From stock exchanges to asset exchanges. In the Journal of Securities Operations & Custody, Volume 14, Issue 4.