Blockchain vs. Transfer Agents: A Call for Genuine Market Innovation

Aaron Kaplan is the co-CEO of Prometheum Inc. Its affiliates Prometheum ATS and Prometheum Capital offer and end-to-end, blockchain-enabled ecosystem for the trading (Prometheum ATS) and clearance, settlement, and custody of digital asset securities (Prometheum Capital).

, are BlackRock’s $BUIDL and Franklin Templeton’s $FOBXX. Collectively, they are nearing $1 billion in assets, largely from investors excited to access the benefits of a blockchain-enabled financial product.

Enabling an ecosystem where digital assets can be issued natively onchain is crucial to advancing trends such as tokenization and truly innovating financial markets. But for this to occur, blockchain technology needs to replace redundant legacy constructs such as transfer agents.Transfer agents – banks, trust companies, or other financial institutions – have managed investor records and transactions since the 1970s.

Authentic blockchain-enabled market structure promises transparency, tamper-proof records, reduced costs for the issuer and the end customer, and smart contracts that execute automatically under predefined conditions. This brand of innovation renders traditional transfer agents obsolete, as blockchain verifies and validates securities ownership.

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