The national stock exchange of Seychelles, a tiny country in the Indian Ocean, is offering investment tokens for its public offering.
MERJ Exchange is offering 1.65 million shares at a price of $2.42 per share. The offering will raise $4 million, approximately 15% of the company’s overall equity, and value the company at $25 million.
The tokenized versions of these shares are registered on the Ethereum blockchain and are available on the exchange. MERJ has partnered with three entities – Jumpstart Securities, a broker-dealer, Prime Trust, a custodian of cryptocurrencies, and Globacap, a U.K – based platform – for the offering.
“These novel financial instruments are here to reshape the financial industry for years to come. MERJ provides the regulatory framework necessary for investors globally to access these markets in a safe and compliant manner,” Edmond Touhy, CEO of the exchange, told Coindesk. Companies listed in MERJ account for more than 20% of the national GDP of Seychelles.
A Security Offering
The offering is notable because it is a security token offering (STO). In such offerings, real-world assets, physical and financial, are programmatically tokenized and offered to investors as securities. This form of fundraising is similar to initial coin offerings (ICOs) in that it allows companies to raise funds by issuing tokens that are available to investors worldwide.
In the regulatory heat of a crackdown by lawmakers on ICOs, security offerings generated considerable hype because they are compliant with laws. But they failed to take off due to a variety of reasons, such as a nascent market, lack of regulatory clarity and the expenses associated with such offerings.
Seychelles is positioning itself to take advantage of a future STO boom. “We have an opportunity here to build a truly world class piece of infrastructure for the next generation of capital markets. Our competitors around the world are the likes of LSE and NYSE and they are not in a position to move so quickly and decisively. There are big fish and there are little fish, but we like to think we are a fast fish!” Touhy said in an earlier interview.