We have had the pleasure to connect with Brooke Navarro, Head of Business Development & Capital Markets, at tZERO. tZERO is the global leader in blockchain innovation for capital markets. Their focus is enabling the market to tokenize and trade digital assets through blockchain technology. Brooke will be joining a host of other DLT innovators speaking at Blockchain Connect this December 3-4 at the London ExCeL Centre.
Since the company was founded in 2014, how has tZERO scaled?
Since tZERO’s inception, the company has been built methodically with a long-term vision for modernizing the capital markets. For the last four years, tZERO has been focused on building out the bones of its ecosystem. The company has made significant progress over the last twelve months in executing its roadmap as well as making key hires that are vital to tZERO’s growth plans, brand and market positioning and business objectives. As a result of this progress, the company’s primary focus has shifted from infrastructure building to driving growth and adoption of blockchain-based securities and our related products.
Can you explain to our readers what tZERO does? What would you say is your value proposition?
tZERO is a technology firm with the goal of utilizing blockchain technology to revolutionize Wall Street so that financial processes no longer need to rely on traditional institutional market structures. We believe that blockchain will bolster and enhance market integrity. tZERO is a keiretsu company of Medici Ventures, the blockchain subsidiary of Overstock.com, Inc. At tZERO, we continue to work toward our vision of creating a robust blockchain-based ecosystem for investors to have venues to buy and sell digital assets (the PRO Securities ATS, tZERO’s Crypto App and, once established, the first national security token exchange, the Boston Security Token Exchange (BSTX)), integrating the technology to tokenize assets (tZERO’s tokenization protocol technology) and establishing direct relationships with customers (subject to our wholly-owned subsidiary becoming approved as a retail broker-dealer).
What do you see as the key security token trends happening in the next six months?
In the next six months, I expect a wider variety of issuers to dip their toes into the market with securities that use distributed ledger technology to enhance investor experience. We are seeing companies from an increasingly wider variety of industries recognizing the advantages of such securities, as well as a significant number of traditional financial institutions and asset managers looking for opportunities to develop such asset classes. At the same time, we continue to educate the market on our thoughtful approach to the space and are closely collaborating with regulators to ensure investor protection and consistency with current rules and market practices as we innovate in a thoughtful and incremental manner.
Why should companies consider tokenization? What do you see as the opportunities?
Tokenization can provide a number of benefits, including fractional ownership, automated compliance, greater liquidity, quicker settlement time, simplified investor distribution, increased transparency and lower transaction costs. At tZERO, our proprietary technology can tokenize a company’s capital raise or existing capital structure, new or existing funds and illiquid assets such as real estate or art. tZERO’s tokenization protocol has clear security, scalability and compliance advantages. The infrastructure behind traditional capital markets has not evolved significantly in decades, which means tokenization can provide advantages to any security issuer looking to simplify and improve their interactions with investors and the ability to raise capital.
What are the factors currently acting as barriers to widespread DLT adoption in financial services?
I believe that a major barrier to the widespread DLT adoption in the financial industry is alignment on the regulatory front. tZERO is a proponent for progress and development in capital markets and we are striving to advance regulatory dialogue, however, this change will be incremental and requires complying with existing laws and utilizing traditional regulations, with the added benefit of blockchain and smart contract technology to enhance investor experience.
Register for FinTech Connect on 3–4 December at ExCeL, London.
