Online trading pioneer, Binary.com has announced plans for an ICO that issues securities-backed smart tokens tied to its shares. This ICO is designed to protect investors by adhering to best practices in corporate governance, investor disclosure, and transparency – similar to an IPO.
Binary.com believes that ICOs and their use of blockchain technology can replace IPOs in the future, even though the two share little to no similarities in the current landscape. Binary.com hopes to change this with their forthcoming ICO scheduled for late 2017.
“The next step for a company of our size is naturally to go public by means of an Initial Public Offering (IPO). However, an IPO in itself is a cumbersome process that’s remained relatively unchanged for decades. Some would say it’s ripe for disruption,” says Binary.com Founder & CEO, Jean-Yves Sireau.
“By opting for the ICO route –– a kind of ‘IPO on the blockchain’ –– we can go beyond the limitations of a traditional IPO. We get a wider reach of potential investors, lower costs of trading, and an immutable audit trail of transactions on the blockchain,” adds Sireau.
Smart Tokens with Real Economic Benefits
As a profitable company with a proven business model, Binary.com plans to offer up to 10 million tokens through an open auction on its website.
Each token comes with two tangible economic benefits for investors. Firstly, investors can receive payments equivalent to the dividends paid by Binary.com on its Ordinary Shares.
Secondly, investors can trade their tokens on the Lykke.com cryptoasset exchange, thus enabling the tokens to potentially increase in value. Lykke is a Swiss fintech company that’s building a global blockchain-powered marketplace for securities-linked tokens.
How ICOs are Superior to Traditional IPOs
ICOs and cryptocurrency exchanges offer more benefits to investors, including 24/7 trading, faster settlement times, and lower trading costs.
Funding your cryptocurrency exchange account with Bitcoin or Ether is also cheaper, easier, and faster. In contrast, funding your account with a traditional stock broker requires a bank transfer which can be slow and expensive.
Companies that wish to perform an ICO also benefit tremendously. For starters, an ICO cuts out the fees paid to several beneficiaries present in an IPO, including the underwriter and the stock exchange.
An ICO also allows companies to raise funds from a global pool of investors, and list their tokens on any number of cryptocurrency exchanges by using smart tokens based on a standard protocol. If these companies were to perform an IPO, they will typically raise funds from investors based in the same jurisdiction as the stock exchange, and see its shares traded only on that stock exchange.
In summary, all the advantages of an “IPO on the blockchain” cannot be replicated by traditional stock exchanges easily. Binary.com’s ICO may just usher in a new wave of blockchain innovation that gives stock exchanges a much-needed wakeup call.
Founded in 1999, Binary.com is one of the oldest and most respected names in online binary trading.Using Binary.com website, customers can trade currencies, indices, stocks and commodities 24/7. Binary.com have the most flexible pricing and the most comprehensive suite of products available. Binary.com has earned an enviable reputation for our commitment to high ethical standards and the quality of the trading experience we provide.