EGW Capital, the blockchain investment bank, is in talks to set up the world’s largest tokenized equity exchange. The company has plans to tie-up with several large investors who own a large chunk of equity holdings of renowned companies like Apple, Google, Reliance Industries, etc. The more prominent investors will tokenize a portion of their holdings which will make the market for small traders. The tokenized shares will be traded on the crypto markets, whereas the underlying stocks will be kept with the custodian. The exchange will be licensed and regulated in either the United States or Singapore. The exchange will ensure liquidity through the liquidity pools dedicated to each tokenized equity.
Any investor who owns equity shares in the Demat account will be able to pool in his shares through the custodian and set up his liquidity pool or contribute to an existing one. This will bring trillions of dollars worth of equity shares to the crypto market.
EGW Capital has previously expressed its intent to tokenize the equity shares of LIC, India’s largest life insurer; however, its IPO got delayed due to a weak economic situation and rising Covid cases. The company has a strong business interest in modernizing tangible-world assets and is actively working on several projects.
“Our exchange will be a bridge between traditional investors and modern investors who know how to manage tokenized assets and trade them onto the crypto exchanges. Even if you are a traditional investor, you will be able to pool in your shares and earn through a liquidity pool. We will take care of the tokenization and listing of the tokenized shares, ” said Rahul Kumar, CEO of EGW Capital.
The exchange will look similar to UniSwap and allow the instant exchange of tokenized shares with several cryptocurrencies. One of the major benefits of this exchange will be that trades will instantly settle, investors from any part of the world can trade a share originally listed in any part of the world and the shareholders can start contributing their own claims to earn a passive income on their holdings through liquidity pools.
This will be a large project as it calls for the acquisition of shares of some top companies. EGW Capital may have to borrow shares and pay an interest rate. Once the exchange begins to attract volume, the investors will pool in their claims. The company may need investment to the tune of US $100-200 million or more depending on the listed equity shares of the company it wishes to tokenize. This very well justifies the US $100 million IEO by EGW Capital which is slated to launch this year.
In the future, EGW Capital may charge a listing fee for listing already listed shares of the listed companies which will greatly enhance the liquidity and the global presence of these shares.
“The size of this project will be massive and will be a great boost for EGW token. The value of the company may quickly rise as all commissions will be paid in EGW token. The demand for the token will be huge as the volume will be higher as for the first time real world assets will debut on the crypto exchanges, ” said Sumit Joshi, Research Analyst at Ernst & Young.
EGW Capital is in the process of issuing its whitepaper for its pre-IEO listing on LuaSwap, where investors will be able to earn handsome returns by simply investing in the Liquidity Pool tokens of EGW Capital. It is also believed that through the pre-IEO product, EGW Capital may introduce the concept of IEO financing, where investors will be able to borrow funds for investing in the IEO.
EGW Capital has not clarified which blockchain technology it may use. However, it should be between Tomochain and Zilliqa.
The upcoming whitepaper will throw light on the key subjects.
