Canadian Securities Exchange Reveals Plans For Ethereum-Based Fundraising Platform

A stock exchange in Canada has announced its intention to host an Ethereum blockchain platform on which companies can hold ICO-like fundraising events.

  • In a February 13 press release, the Canadian Securities Exchange (CSE), a stock exchange located in Toronto, revealed plans to introduce an Ethereum-based “securities clearing and settlement platform” through which approved companies can conduct “security token offerings”, or “STOs.”

    According to the exchange, these STOs differ from ICOs in that “an issuer seeking to raise capital with an STO must meet the requirements of both provincial regulators as well as the CSE,” and will face ongoing oversight by the exchange and regulators.

    The tokens on the digital clearinghouse will be backed by both equity and debt securities, and trades on the platform are expected to clear and settle instantaneously, in contrast to the two business days that it currently takes to settle their traditional counterparts.

    The CSE projects that the system will offer a number of other benefits as well, including “cost savings and error reductions associated with processing corporate actions,” like splits, and “savings achieved by eliminating the need for investment dealers to post initial and mark-to-market capital with a clearing house pending the settlement of trades.”

    An exact launch date has not been set, as the CSE has not yet completed the “regulatory process for the establishment” of the platform. The press release states that the exchange “intends to file an application to seek approval from Canadian regulators to recognize the new clearing house.” All the same, the CSE has already signed a Memorandum of Understanding with the private blockchain firm Kabuni Technologies Inc. that would allow the company to be the first to raise funds on the platform. 

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