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Creating the World’s First Globally Compliant Decentralized Capital Market

Capital markets are places where select individuals and organizations can purchase and sell securities in a regulated and controlled manner. The most common securities sold on capital markets include equities (common and preferred stocks) and bonds (a type of debt security) — usually issued by large companies.

However, since capital markets first appeared in the 17th century, they have largely operated as slow, monolithic entities, that are resistant to change — much to the detriment of both investors and listed companies.

A Decentralized Solution: AllianceBlock

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AllianceBlock is establishing the world’s first globally compliant decentralized capital market. Our solution is built on the principles of censorship resistance, transparency, and openness. AllianceBlock’s Prometheus protocol aims to realize a decentralized, collaborative and sustainable capital market that brings together issuers, investors, institutions, traders, experts, advisors, other service providers, and even talent.

The range of decentralized capital market enabling capabilities enabled by the protocol includes peer-to-peer transaction validation and automated settlements, asset swap and monitoring across blockchains, and much more.

For example, through AllianceBlock’s Prometheus protocol, companies can easily issue regulated and registered digital securities that are identifiable with an International Securities Identification Number (ISIN). This process is extremely quick and cost-effective, making security issuance much more accessible to even smaller firms, while still meeting the strict security standards imposed by regulators.

This system addresses one of the greatest flaws of capital markets — accessibility. Through AllianceBlock, firms don’t need to navigate a gauntlet of regulations to launch their securities and nor do they have to pay extortionate fees to be listed on exchanges. Instead, AllianceBlock handles everything from A to Z, allowing customers to quickly get up and running with their digitized securities while providing clearance, settlement, and custodial services for investors.

AllianceBlock achieves this thanks to a unique combination of a decentralized governance and Securities’ Issuance, and Lifecycle Management layers, which enable the end-to-end issuance and management of digital securities that can represent practically any real-world or intangible asset. Together, these two layers, in addition to the Cross Border Regulatory Compliance Layer (CBRCL) form the backbone of the Prometheus protocol — AllianceBlock’s framework for regulatory-compliant asset digitization and issuance.

This setup allows financial institutions to skip over the slow and archaic capital markets of the past, and move directly into the burgeoning world of decentralized finance (DeFi) — benefiting from a dramatically faster time-to-market, reduced cost overheads, and the future-proof security and capabilities of a blockchain-based distributed ledger.

Automating Compliance and Distributing Decision-Making

Capital markets typically adhere to strict regulatory controls set out by the financial authority in the country they operate in, such as the U.S. Securities and Exchange Commission (SEC) in the United States and China Securities Regulatory Commission (CSRC) in China. These regulators all have a different set of criteria that can make listing securities a nightmare for all but the most well-heeled firms.

But with AllianceBlock, companies can completely avoid the hassles of ensuring regulatory compliance, since this is automatically assured thanks to the Cross Border Regulatory Compliance Layer (CBRCL), which works to make sure that transactions are compliant with the relevant regulations, in a process that can be amended over time as the regulatory landscape changes.

Likewise, AllianceBlock also seeks to revamp the decision-making process using an innovative reputation scoring process, which sees participants grow their influence on the platform — ensuring everyone has a chance to be heard, not just those with the largest portfolio. Instead, AllianceBlock allows centralized institutions to connect seamlessly to the decentralized ecosystem via API, ensuring traditional finance companies can easily leverage the benefits of DeFi technologies and AllianceBlock’s distributed decision-making system.

Together, these features make for a more inclusive capital market, that is ripe for growth and innovation.

Incubated by the famous accelerators Station F and L39 (the largest European Fintech incubator) and 2019 Alumni in the famous Kickstart Innovation Program in Zurich AllianceBlock was one of the 12 VC-vetted fintech startups generating buzz at the Money20/20 conference in Amsterdam.

Documentation:

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Bridging Traditional Finance and Decentralized Finance

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