Tokenised equities have been launched on various blockchains, but this is the first time they will be coming to Bitcoin.
Portal, a cross-chain Layer-2 DEX network, announced earlier today that it had partnered with HighCircleX, a blockchain-based asset marketplace by High Circle Ventures.
The partnership will see the two entities tokenise shares in pre-IPO companies on the Bitcoin blockchain. This latest development is a huge plus for Portal in its bid to bring real-world use cases to Bitcoin.
According to the press release shared with CoinText, the tokenisation of equity in private, pre-IPO companies will help bring liquidity to illiquid assets, the companies said. Furthermore, it will increase the utility of the Bitcoin blockchain.
Portal’s Executive Chairman, Dr. Chandra Duggirala, said his company is committed to bringing more use cases to the Bitcoin blockchain. He said;
“Portal is bringing real-world use cases to Bitcoin. Eventually, we will see the tokenisation of many more financial assets onto the Bitcoin blockchain. Although these assets are not bearer assets like Bitcoin, having both digital asset securities and non-security digital assets available through a simple interface for users who meet accreditation investor criteria marks the beginning of merging the Bitcoin ecosystem with mainstream finance. This also fixes the problem of liquidity fragmentation across many different exchanges and applications”.
HighCircleX said it is committed to eliminating some of the limitations investors face when investing in private markets, including the unspecified time periods when money is locked up, a lack of liquidity, uncertainty about the true value of holdings and more. Hemanth Golla, the CEO of HighcircleX, said;
“HCX makes it a breeze for investors to invest in private equity offerings. It gives members instant access to fractional ownership of stocks in the hottest companies. We believe that tokenization and fast, easy tradability that come with it will unlock and expand this market tremendously.”
Portal said its users would get seamless access to tokenised securities and can trade non-security digital assets from a single wallet.
Some investors might be concerned that they are acquiring securities by trading these tokenised assets on Portal.
However, the companies explained that HighCircleX (HCX) structures and manages an LLC for each investment. Thus, investors don’t directly own shares of the underlying company. Instead, they own tokens that represent ownership of the LLC.