This Australian Firm Is Breaking Down Barriers In the Financial Markets

STAX aims to provide a middle ground where financial opportunities are globally accessible by leveraging the technological innovations brought about by blockchain technology with the right regulatory knowledge and strategic partnerships
This Australian Firm Is Breaking Down Barriers In the Financial Markets
Image credit: Pixabay

Grow Your Business, Not Your Inbox

Stay informed and join our daily newsletter now!
Contributor
Head - Business Strategy & Growth, BlockchainPRBuzz
5 min read
Opinions expressed by Entrepreneur contributors are their own.

Often seen as nothing short of ‘gambling’, the stock market has a bad reputation amongst those who have a limited understanding of its inner-workings. While there is an element of speculation, the stock market’s main function is to connect investors and companies looking for capital through IPOs and to provide liquidity for these investors by allowing stocks to be traded freely.

Not everything is, of course, perfect. Excessive leverage, market manipulation and irresponsible securitization have all caused major issues in the past but have also been retroactively addressed in order to create a more robust and transparent market in a process similar to what can now be seen unfold within the cryptocurrency industry. Regulation is a hefty task and one that is never complete.

While far from perfect, the stock market is one of the fire engines behind our current economy. Investment and access to capital drive innovation forward and create value for all parties involved. Companies raise capital which is used to expand or create new products and generate profits for investors. Investors who made smart choices can increase their holdings and earn disposable income to buy these new products and improve their quality of life. 

The stock market is a positive-sum game that has taken us from farming to space exploration, yet, being a highly regulated industry it has failed to provide any significant innovation and is still limited to a select few individuals who can participate in it and this is exactly what STAX, an STO platform is aiming to offer.

Stock market: Limited to a few

While in theory, the stock market is a well-oiled machine, it still has many shortcomings especially when it comes to accessibility and innovation. Some companies that need capital do not have the necessary resources to start an IPO on a stock market exchange which is a lengthy and a nuanced process. At the same time, said IPOs are only available to accredited investors with large sums of capital and limited to one country and currency.

With our current global economy, supply chains that stretch across continents and globally available Internet, it doesn’t make much sense that investors in South Korea can’t participate in the Uber or Tesla IPO. The same can be said for investors looking to provide capital to companies in developing markets where this capital could bring positive impact.

This is where the cryptocurrency industry is two steps ahead. Of course, they are so due to being largely unregulated, but still cryptocurrency exchanges are available worldwide, 24/7, with minimum capital requirements and access to advanced trading tools. ICOs, as disastrous as they proved to be, also say a lot about the shortcomings of the legacy financial industry. 

The same demand for globally available financial opportunities can be witnessed in the emergent Decentralized Finance (DeFi) space which is providing decentralized investment tools for individuals who cannot access them otherwise.

This company is globalizing financial opportunities

So what’s the middle ground between robust and clear regulation and innovation in the financial industry? That’s one of the questions the STAX Platform set out to answer. By leveraging the technological innovations brought about by blockchain technology with the right regulatory knowledge and strategic partnerships, STAX aims to provide a middle ground where financial opportunities are globally accessible.

STAX is Australia’s first equity capital raising platform to accept both fiat and digital currencies. 

To put it shortly, STAX can be compared to a 1971 Nasdaq which pioneered electronic stock market trading and was home to some of the most important IPOs to date. Standing on the shoulders of giants and applying a similar philosophy, STAX can continue to drive innovation forward with the same mission of making the equity market globally accessible for companies and investors alike. 

Learn more on stax.exchange tapping into both the legacy and cryptocurrency market, STAX has been able to leverage the best of both worlds, providing a solution that allows companies from all over the world to raise capital from retail and institutional investors alike.

In a process known as tokenization, STAX allows for digital representations of companies that go through our platform to be issued and traded online. These same stocks are listed on an Australian Tier one Market Operator and made available for secondary trading in the STAX trading platform. With the current economic downturn brought about by the COVID-19 pandemic, this solution couldn’t have come at a better time. STAX Platform’s CEO, Kenny Lee, recently said a publication: “With this landscape that COVID-19 and the oil-price war has presented, the equity market is a ripe environment to seize opportunities where the risk-return balance is so much in investors' favour it is essentially a once-in-a-lifetime opportunity. As severe as this setback might be, it is finite, and activity will begin to normalize—the underlying economic infrastructure is robust enough to allow for activity to recover to pre-COVID levels, as appears to be the case in China.”

Why catering to crypto and legacy is important

The STAX Platform leverages blockchain technology in order to ‘tokenize’ securities and to make them globally available. This creates new opportunities for companies raising capital and for investors alike. Another major factor, however, is the use of cryptocurrencies themselves as a means to raise capital.

This is important because it allows unbanked or underbanked populations to access these opportunities with nothing more than a small amount of capital and a smartphone. Moreover, it allows the crypto community to tap into the legacy market which is usually subject to less speculation and illicit activity. Lastly, it also allows companies to access a $200 billion market cap industry, where innovation is rampant. 

 

Latest on Entrepreneur