Why Every Investment Manager Needs a Digital Asset Securities Strategy – A View from InvestaX’s CEO

Julian Kwan believes that every investment manager should have a digital asset securities strategy to help them increase their assets under management by offering new digital products and staying relevant, thereby creating new revenue streams for their business. Julian is a serial entrepreneur who has co-founded eight companies, including social media, real estate investment & development, proptech and blockchain, and is the co-founder and CEO of InvestaX, which is a Singapore Security Token Platform. We have briefly summarised below a fascinating and lively presentation that Julian, wearing his InvestaX hat, gave to delegates at the Hubbis Investment Solutions Forum in September 14 in Singapore.

Julian first told delegates about the role and missions of InvestaX:

“We live in a digital era where accessibility is the driver of success. In 2008, Satoshi Nakamoto launched Bitcoin, a new peer-to-peer electronic cash system that brought a new paradigm to the concept and our belief structures of money.

Underpinning Bitcoin was blockchain technology, a decentralised distributed ledger technology that records and tracks the provenance of your digital asset. It changed the game. What bitcoin did to the monetary currency is what InvestaX is doing for private market investments. InvestaX is a licensed investment and trading platform that uses blockchain technology to tokenise illiquid assets into easily tradable tokens called digital securities or security tokens.

Despite being 4.5 times larger in size than public markets, private market opportunities such as private equity, real estate and venture have had little to no innovation and still remain inaccessible to most investors.

Transactions are slow, non-transparent, and investments are illiquid, meaning they're hard to buy and sell. At InvestaX, our mission is to bridge centralised finance and decentralised finance to provide access to tokenised real assets as easily as buying stocks or cryptocurrencies, creating a huge explosion of value.

InvestaX is pioneering how investors access digital assets by providing access to new technology-driven investment products using blockchain infrastructure to enable secondary market trading and automating processes for transparency and efficiency.

Invest in and trade instantly in digital assets such as private equity, real estate, venture capital, blockchain companies, fractionalised NFTs and more. We have built key infrastructure to digitise private assets so you can buy, sell, trade, borrow or lend instantly across the world 24/7. The opportunities are infinite. The groundwork is laid. Join the evolution and sign up at www.investax.io.”

Opening up a new world of potential via digital assets

Julian told delegates: “Digital security tokens are not cryptocurrencies, and they are not stable coins. Digital securities are digitised investment contracts that provide an investor with a contractual claim on an underlying asset. Through the process of tokenization, shares of any entity, can be issued and traded as digital tokens on a blockchain ledger. They now include many NFTs and DAOs, which are typically investment structures purely issued on the blockchain paperless-based investment vehicle, but in short, they're actually security tokens as well.

We believe fundamentally that everyone in this room needs to have a strategy related to digital securities for market assets. The reason is that the risk of not getting started far outweighs the risk of getting started and being left behind by your competitors.

What tokenisation does, essentially, at the high level, is it brings the DNA of public market assets, which is digital, tradable, transparency, liquid, lending, borrowing, etc., and marries that DNA with private market assets, which have been notoriously difficult to distribute to most of the finance companies in Singapore today, around the world, because they weren't public and they were on pieces of paper and they weren't tradable and they weren't liquid, so no one wanted to sell them to their customers.

However, the size of this market is enormous, at up to USD10 trillion globally, and the opportunity is immense.”

These are early days still, Julian told delegates, but the road ahead is clearer and lined with ever-greater opportunity

Julian elaborated on those comments: “We're just getting started in this industry. The total digital assets securities issued today might be just USD5 billion compared to potential of USD10 trillion and have focused mostly to date on real estate.

Any investment company that isn't in blockchain, that is still issuing shares on paper, is still based in traditional finance, there is no connectivity to any of the digital asset space. Whereas if you start issuing your shares as security tokens and digital securities, you're making yourself Web3 compatible, because you're issuing shares of your investments on the same infrastructure that all the other digital assets such as cryptos or stable coins are on.”

As the old world of finance struggles, the new world of digital finance emerges – and amazingly, it is based on real assets and real economic realities

Julian explained how digital assets represent the future:

“The value proposition is that you're able to access our new world of assets. A lot of the old models private banking, wealth management and finance in my mind are dying; they are being attacked by zero trading fee stock platforms, FinTech platforms, and that means you need new products to sell to your clients.”

Well, lo and behold, we have a solution. You can now help your clients access these new assets which in time will be far greater than the public markets and not as hard to sell because we are simply that they can buy a digital share of real estate, or another real asset, but simply in a much better format. Moreover, you can make better fees in digital assets!”

InvestaX offers an advance, regulated, compliant and globally connected platform to expedite these strategies

And he told guests why InvestaX was created: “At InvestaX, you can issue, trade, custodise any of your security tokens on our platform, we have top quality brand name partners including HSBC as our Settlement Partner and other leading firms. You can pay with stable coins, you can invest in plain fiat, we're integrated with multiple public blockchains, we have high-quality custody partners, and we also have the best distribution network around the world with similar platforms like us. You will see more and more activity – this industry is only three or four years old, and the infrastructure is now being laid that will be the springboard for a real explosion of activity as it goes kind of galactic.”

Julian’s final word – InvestaX is ready to welcome you to the digital asset universe

Julian then offered delegates some considerable detail on the platform, before singing off with his final comments:

“Tokenisation, we've always said, would come to all assets, would also produce new investment products that we've never seen before. That view has been validated in the last couple of years and we are ready for an exciting innovative and dynamic world of digital assets ahead. For the wealth industry, this represents an extraordinary opportunity, and we are here and ready to work with you.”