Globacap issues first FCA-regulated equity tokens

Technology startup Globacap has announced the issuance of digital tokens representing ownership of shares. This “tokenization” process was carried out on the Globacap blockchain platform under the supervision of the UK Financial Conduct Authority (FCA) as part of the FCA's sandbox program, under which firms can test innovative products.

With regard to regulatory issues when creating equity tokens on a public blockchain, Globacap was advised by the law firm Hogan Lovells. This process of tokenization of rights will facilitate further transactions by automatically fulfilling the administrative and legal requirements for transfer of ownership of shares under UK companies law. Such transactions will be recorded on the main token blockchain. Globacap's tokens differ from other types of equity tokens, which do not involve digital derivation of ownership.

The tokenization process can be applied to most asset classes, providing an effective means of digital securitization. Because digital tokens are easily transferable, even on a regular exchange, this could completely transform the private investing process, as illiquid investments can now be made in seconds rather than weeks, and with minimal overhead.

Using blockchain technology, Globacap can provide a more open capital market that will allow investors of all types to participate in private investments previously only available to institutional investors. This is expected to create a new wave of economic growth as previously illiquid investments now become available.

According to thefintechtimes.com