Swarm Launch: World’s First DeFi Stocks and Bonds Trading
Swarm, a Berlin-based fintech company, has launched what it says is the world’s first public investment offering using a form of crypto technology known as DeFi. Swarm turns securities (i.e. stocks, bonds or mutual funds) into “on-chain” tokens which can be traded on their platform. Well, as Altfi reports, currently only tokens for Apple, Tesla, and two US Treasury Bond exchange-traded funds (ETFs), but more stocks and assets are sure to follow. The tokens are controlled by code and may be “added to liquidity pools” where they may earn yield or be kept in the buyer’s virtual wallets. Swarm takes a cut of every trade. In the ever increasing virtuality of financial products, platform Swarm connects the new “decentralised finance” (blockchain) evolution to the familiar trading of trusts and assets. The hybrid gives institutional players such as banks, hedgefunds, brokers, dealers, or asset managers a chance to mix their established game with crypto. Or as Swarm puts it, “Swarm’s multi-asset platform enables users to tokenize and trade real world assets and securities alongside crypto.” What’s the benefit? Well, for one thing, the market is never closed, unlike regular trading. Apparently it is all fully compliant with German regulation, though operating “under a prospectus registered with the Financial Market Authority in Liechtenstein” (press release).