According to a Monday announcement shared by Cointelegraph, the Decentralized Finance (DeFi) protocol Portal has partnered up with HighCircleX (HCX), an asset marketplace, to tokenize stocks from pre-initial public offerings (IPO) companies.
This collaboration will make private equity investing easier by leveraging the Bitcoin (BTC), blockchain. HighCircleX hopes to address problems like the inability to liquidate traditional assets and uncertainty regarding their value.
The announcement states that HCX will manage a limited-liability company (LLC), which will be used for investments. Investors will not be able to own shares in the LLC but they will have tokens that “represent ownership”. These tokens are available for trading on the HCX exchange.
Additionally, the LLC will use the funds to buy a preIPO investment. SpaceX, Epic Games and Klarna are some of the pre-IPO companies that could be tokenized or traded.
Portal’s executive chairman Chandra Duggirala explained that the partnership is designed to provide more utility for BTC. He stated that:
“Portal brings real-world applications to Bitcoin. We will eventually see tokenization of many other financial assets on the Bitcoin blockchain.
Duggirala also explained that, while assets differ from BTC in some ways, simplifying the interface to traditional assets is a way to “beginning of merging Bitcoin ecosystem with mainstream financial services.”
Related: A Texas-based Bitcoin mining company files for $60M IPO
Coinbase, a crypto platform, became the first American company to go public last year. Based on current market trends, however, BTC ownership is still better than Coinbase stock (COIN), by 20%.
Blockchain.com, a crypto block explorer and exchange, is currently exploring ways the company could go public in 2022. If the firm is successful in conducting an IPO in the United States, it will become the second American exchange to do so, after Coinbase.
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