Can the block chain revolutionize over-the-counter (OTC) securities trading? A team of Toronto-based entrepreneurs thinks it can, and they are developing a decentralized securities processing platform. Their platform, Equibit, will allow investors and securities issuers to do business without any third parties. If successful, this peer-to-peer electronic equity system will revolutionize securities trading.
Equibit is a block chain based securities register that manages OTC equity, warrants, partnership units and more. The system includes a shareholder communication system, plus the ability to issue BTC-denominated dividends and distributions. Equibit will manage functions typically performed through transfer agents and central depositories. Hence, the system will save costs for issuers and brokers.
“Equibit lays the foundation of a whole new securities market,” said Chris Horlacher, managing partner at Equibit and a former securities industry CFO. “It allows investors and issuers to come together and manage their relationship without the need for third parties such as transfer agents and central depositories.”
A decentralized trading platform will provide the OTC market a way to avoid transparency issues that have invited regulatory scrutiny.
The group recently published a website and a white paper that details the proposed system. The team is looking for investors to help them meet their planned Jan. 1, 2016 launch date.
The raising of capital via private, OTC markets is currently underserved by modern technological innovation, according to the white paper. “In addition, recent events have revealed problems of transparency, inviting public criticism and scrutiny from regulatory authorities,” the paper notes. “A peer-to-peer platform facilitating the creation and exchange of private shares represents a shift in the OTC market towards more efficient, transparent operations as well as greater accessibility to the investing public and issuing corporations.”
The Equibit platform allows issuers to maintain equity across a broad base of investors as well as distribute earnings via instant and automatic bitcoin transfers. The system can also poll shareholders in a transparent and auditable manner. The system improves the security and transparency of traditional OTC markets.
“When I first took notice of bitcoin in 2010, I was quickly inspired to come up with a securities system based upon the same technology,” said Horlacher. “The timing just wasn’t right back then, though, to be introducing something like this. Now that bitcoin contains several billion worth of capital and investors are getting comfortable with the technology, the market is finally ready for an efficient way to invest with and in cryptocurrency.”
For information visit www.equibit.org.
Horlacher has participated in numerous start-ups and strategic initiatives. He holds chartered accountant and chartered professional accountant designations and is certified by the Canadian Securities Institute as a partner, director, and chief financial officer. Team members include Marc Godard, development partner, David Mondrus, development partner, and Nathan Wosnack, communications partner,