London-based crypto trading firm Copper plans to start offering tokenized securities early next year, according to reports on Nov. 29. Under the leadership of former British Chancellor Phillip Hammond, the company expects to capitalize on institutional investors’ demand.
The service is expected to be first rolled out in Abu Dhabi, United Arab Emirates, by its new arm in the country, Copper Securities. The company is reportedly in the process of securing regulatory approval from local authorities.
Copper plans to use blockchain technology to provide securities financing and other payment solutions to institutional clients over the coming months. More than 90 markets around the world will be accessible through the new platform, said the company.
Copper acquired its securities arm earlier this year with the goal of offering tokenized securities within the Abu Dhabi Global Market (ADGM), an international financial center and free zone on Al Maryah Island.
Hammond has long-standing ties to the region. He has been advising the government of the neighboring country Saudi Arabia since 2021, following approval by the United Kingdom’s lobbying watchdog. In the same year, Hammond was appointed as a senior adviser to Copper, before taking over as the company’s chair earlier 2023. Back then, Hammond shared his thoughts on how blockchain technology can benefit the financial sector:
“I remain firmly of the view that the post-Brexit U.K. Financial Services sector needs to embrace Distributed Ledger Technology as a key part of its strategy to remain a major global financial center.”
Securities tokenization involves converting financial assets like stocks or real estate into digital tokens on a blockchain. Tokenization facilitates access to expensive assets and increases market liquidity by allowing fractional ownership, thus democratizing ownership of financial assets.
Assets tokenization has been a hot topic in 2023, and its popularity is likely to continue growing in the future. In the United Kingdom, investment managers are being encouraged to use blockchain technology to tokenize investment funds, moving away from traditional record-keeping systems. A recent report published by the Investment Association argued that the tokenization of investment funds can lead to a more efficient and transparent financial industry.