CTX to launch regulated exchange powered by Nasdaq technologies for asset-backed tokens, focusing on green financing
Singapore-based Cyberdyne Tech Exchange (CTX) is to launch the world’s first regulated digital exchange to be powered by Nasdaq technologies, for asset-backed tokens.
The tokens will represent fractional value in real assets including green infrastructure, equity, real estate, art, bitcoin and Ethereum.
CTX will allow qualified asset owners, accredited investors, institutions and corporations, to issue and trade in such digital assets by the second half of this year. It will also provide settlement and custody of the tokens.
The move to launch the exchange comes after the company received Capital Market Services licenses from the Monetary Authority of Singapore this month to deal in capital market products and provide custodial services. CTX has also been granted approval-in-principle for a Recognised Market Operator license in December 2020, as well an exempt Payment Service Act licence.
Tokenising an asset using blockchain technology and smart contracts creates a security token that represents a share or ownership of a piece of the underlying asset, which is often of high value or is illiquid. The process makes the asset accessible to many more investors and allows issuers to raise funds in a cheaper, faster and easier manner compared to a conventional IPO or bond offering.
Founded in 2018, CTX says it sees exciting potential in the issuing and trading of tokens of green assets, be it solar or wind farms, smart and sustainable buildings, green industrial parks, sustainable agriculture and zero emission mobility.
Dr Bai Bo, Executive Chairman and Co-Founder of CTX, says: “We believe security tokens will be the new equity and will drive the next wave of the digital economy. For investors, it paves the way for fractional ownership of hard-to-access investments and for businesses, it offers a new source of funding that is cost-efficient, trackable, and highly liquid.
“CTX will seamlessly connect mainstream financial institutions and accredited investors to innovative green assets on a robust exchange that will operate within the rigorous and progressive regulatory framework that Singapore offers.”
Dr Bai, a Chinese American, is also Chairman of Asia Green Fund (AGF), one of Asia’s first impact private equity funds with over USD2.0 billion assets under management.
A former investment banker at Goldman Sachs in New York and a Partner and Managing Director of Warburg Pincus, Dr Bai has a PhD in Physics from the Massachusetts Institute of Technology and a Certificate in Financial Technology Option from MIT’s Sloan School of Management. He received his Bachelor of Science and Master of Science in Modern Physics from the University of Science and Technology of China.
AGF was founded in 2016 with a focus on tech-enabled green impact investments, pursuing both financial returns and quantifiable environmental impact. In February 2021, AGF co-led a buyer consortium for a USD510 million acquisition of Dupont Clean Technologies. A month later, it was featured in Private Equity International’s list of “Innovators in ESG and Impact Investing 2021”.
Dr Bai said he hopes learnings from managing AGF in the last five years will help position CTX to be the global hub for green financing. He predicted that demand for green assets will surge in the coming years as countries pursue initiatives to meet their commitments toward their announced goals of achieving carbon neutrality by 2050 or 2060.
The OECD estimated that USD6.9 trillion per year in infrastructure investment would be required between 2017 and 2030, in order for the world to achieve the goals under the Paris Agreement of limiting the rise in global temperature to below two degrees Celsius.
Ma Jun, Chairman of Green Finance Committee of China Society of Finance and Banking and a former chief economist at the People’s Bank of China’s Research Bureau, said China’s move to achieve carbon neutrality may require up to 500 trillion yuan over the next 30 years. “It’s important for the financial services industry to develop products linked to carbon footprint,” he noted.
Dr Bai adds: “We are convinced that the future of exchanges is digital and green, and we want CTX to be the driving force for green financing.”
AGF has vigorously ensured that the carbon footprint of its investments is quantified and certified with independent agencies such as Bureau Veritas. Dr Bai said CTX will apply that same approach and will be the first exchange to require carbon emission disclosures for all assets traded on its system, allowing both issuers and investors to track the carbon footprint of the assets in their possession.
CTX’s trading architecture will deploy Nasdaq’s best-in-class matching and market surveillance engines, which are currently utilised by national exchanges, such as the Hong Kong Stock Exchange and Singapore Exchange, clearing houses, central securities depositories, and regulators in over 50 countries.
Like Nasdaq, CTX requires all issuers to satisfy its listing standards that include both qualitative and quantitative criteria. All issued asset-backed tokens are priced via CTX’s proprietary book building process to ensure transparency.
AGF recently invested an additional USD15 million in CTX whose two other co-founders are Gabriel Wong and Lily Hong. They bring deep financial service experiences and technical expertise to the company.
Wong, a Singaporean, was an investment banker at Citigroup Global Markets in New York, with an MBA from Columbia Graduate School of Business and a qualified attorney licensed in New York and Singapore. Hong, a Chinese national, is the founder and CEO of a data security technology service provider for industrial IoT applications, of which Tencent is the largest institutional investor.
In May 2019, Hong was awarded the Nasdaq Global Award as the “Five Most Influential Women in Financial Technology” for her deep domain knowledge and expertise in the application of blockchain data security technology to the financial industry.
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