Securitize, a startup hoping to use blockchain technology to upend the securities industry, raised a $12.75 Series A investment round led by Blockchain Capital according to Techcrunch. The venture arms of two giants in crypto — Ripple’s Xpring fund and Coinbase Ventures — also participated in the funding, which the company will use to carry out its vision for “digitizing private and public shares.”
The company believes traditional equities have flaws that a blockchain-based offering can ameliorate. Instead of offering shareson NYSE or Nasdaq, so-called digital security offerings can offer a different way of allowing companies to sell an ownership stake that can be freely traded.
Securitize isn’t creating a new exchange itself, but rather building the framework to help firms navigate the regulatory environment, provide liquidity on markets that trade 24/7/365, and increase transparency. Coinbase, among others, has expressed an intention to offer digital securities trading in the future and Securitize CEO Carlos Domingo thinks 10-15 exchanges will enter the market next year.
“[The] blockchain just happens to be a better way to deal with securities,”
Domingo told TechCrunch. Domingo believes cap tables — a record of who owns what — will especially benefit from tokenized trading.