The proof-of-concept, led by InvestaX, UBS, State Street and CMS, examined the technological, legal, and practical feasibility of tokenizing the Singapore Variable Capital Company (VCC) using a blockchain-native structure.
«Project e-VCC» was used to determine the lifecycle and workflow processes for efficiencies gained using an e-VCC by the relevant stakeholders, and the potential key considerations for tradability of such e-VCC securities on exchanges like InvestaX, an announcement on Thursday explained.
The project also explored VCC fund shares issued directly on either a permissionless/public blockchain or a permissioned/private blockchain. It also compared the benefits of a blockchain-native security token design (one-tier) as opposed to a tokenized security (two-tier) design.
Hashstacs (Stacs) and the Tezos Foundation were selected as private and public blockchain protocol providers respectively for this global-first initiative.
Potential Tradability
«By tokenizing the VCC, we hope to support Singapore’s ambition of becoming the world’s fund management center as well as the hub for capital markets innovations,» Julian Kwan, CEO at InvestaX, said.
Project e-VCC also led to the conclusion that there is nothing explicit in Singapore’s existing laws prohibiting issuance of blockchain-native securities.
«Such securities would come under the purview of digital tokens that constitute capital market products and be regulated under the Securities and Futures Act. However, the potential application of stamp duty was identified as a hurdle which must be addressed in order to enable secondary trading of e-VCC shares,» the announcement said.
