It shouldn’t come as a surprise that Blockchain technology has started to revolutionize a number of industries across the globe. Blockchain holds massive value in that it eliminates the middleman for many financial transactions, ensures security and is entirely transparent.
As a result, blockchain-based platforms and cryptocurrencies, such as Bitcoin and Ethereum, are being adopted by a number of countries. For example, Japan just confirmed Bitcoin as a legal form of payment. Swiss tax authorities have confirmed that Bitcoin is VAT-free in Switzerland. Ukraine’s government is passing legislation in 2018 that will allow foreign investors to purchase land via a blockchain platform. Additionally, 80 percent of banks today are developing their own blockchain technology.
And this is just the beginning. A “decentralized economy” built entirely on blockchain is a real possibility, a notion that has now piqued the interest of many investors and investment management firms.
Blockchain: The Future of Investing
Blockchain technology has the potential to transform and revolutionize investment management business value chains, making the process more auditable, transparent and secure.
Typically, investments funds are private and difficult to access. Investors are required to have a certain amount on money to enter these funds and it’s common to lose liquidity. Additionally, it’s extremely difficult even for an experienced advisor to set up a fund due to legal issues, compliance, partnerships, fundraising, etc.
The fintech company, Blackmoon Financial Group, wants to ease this process. The firm just announced a blockchain-based platform to power what they call, “tokenized investment funds.” Blackmoon Crypto serves as a one-stop solution for asset managers to create and legally manage compliant tokenized funds.
To make this process manageable, the firm covers all the aspects from technology and infrastructure, to legal compliance and corporate structuring. Any experienced and approved investment manager can create a fund based on the Blackmoon Crypto and receive immediate access to the liquidity, which is backed by the platform’s legal and IT infrastructure.
Investing in Tokens
In order to better understand how tokenized investment funds work, Blackmoon Crypto and other companies issue crypto tokens through initial coin offerings (ICOs), raising capital for their development. Tokens are built on top of the blockchain platform, which is the same software technology that powers Bitcoin, Ethereum and other cryptocurrencies. These assets can be then traded at a profit or loss as their owners see fit.
Blackmoon Crypto’s token, known as BMC, will be distributed during the crowdsale period starting on September 12, 2017. At this time the holding company, owned by the Blackmoon Financial Group, will issue BMC to the buyers. All funds that will operate on the Blackmoon Crypto Platform will generate a stream of fees toward the Platform, and these fees will be distributed among the owners of Blackmoon Crypto tokens who are registered as Continuous Contributors. Contributors will be required to choose one of a wide range of possible roles and perform specified actions to help us to develop the Platform. Some of Blackmoon’s future funds will also be created in the Waves platform, the most well known Ethereum competitor. Waves is working to make blockchain technology accessible for a number businesses that are not already involved or familiar with the cryptoworld.
In other words, the ICO market could be considered as an unregulated “blockchain-enabled stock market.” And while this is still an emerging concept, there have already been 92 companies this year that have raised more than $1.2 billion via initial coin offerings.
Bringing Together Fiat and Crypto Currencies
Clearly, there is a lot of potential for investors when it comes to investing in digitalized tokens. However, there is an even larger opportunity to raise capital and make a profit when investors have access to both fiat and cryptocurrencies.
What’s especially unique about Blackmoon Crypto is that the firm aims to bridge the gap between fiat and crypto currencies. Currently, the majority of tokenized investment vehicles are either fully crypto-oriented or linked to a tradable asset, like the U.S. dollar or gold.
Access to fiat investment opportunities provides diversification in terms of income sources, while retaining all the benefits of the crypto universe, including decentralization, transparency, and exchangeability. According to Blackmoon, traditional investors get higher net return due to the cost-efficient structure of tokenized funds.
“We believe we can link interests of the crypto society and traditional investment markets by giving investors access to a wide range of different investment options. These options are managed by a range of experienced fund managers around the world through brand new blockchain tools,” said Oleg Seydak, CEO of Blackmoon Crypto.
The Future of Investing Looks Cryptic
Investors and investment management firms are still trying to fully understand the concept behind blockchain-based platforms for tokenized investments. However, early adopters will benefit greatly. There are now more companies raising money via coin offerings and many startups offering blockchain platforms are emerging.
“Blockchain provides us with an ability to create unified vehicles for a wide range of valuables. This vehicle allows us to address worldwide liquidity and customers, without necessity of local customization. This creates a kind of investment product that the Global Government could do if it was to exist,” said Oleg Seydak.