Digitization of capital: a revolution underway in companies

Blockchain will contribute to the growth of companies through direct shareholding by customers and suppliers. This proximity shareholding will give rise to an economy that's just like it. Find out more in this article written by the director of Fongit.

In recent years, blockchain-related applications have been treated like Aesop's fable, in which the shepherd jokes about the arrival of the wolf, without being believed, until the day the wolf bursts in. This is a well-known mechanism for certain technologies that raise high expectations, but take longer than expected to be finally adopted. Such is the case with blockchain.

This time, the wolf is on the loose, as confirmed by a number of indicators. On the one hand, investments by specialist players are growing steadily; on the other, volatile financial markets have prompted traditional players to invest in crypto and blockchain projects.

Two Swiss cryptobanks

Venture capital funding for blockchain startups has thus reached over $25 billion in 2021, up more than 700% on 2020. These investments will increase further in 2022 by the leap in crypto, non-fungible tokens (NFT), DeFi and Web 3.0 startups, which today account for more than 4% of venture capital worldwide, up from 1% in 2020.

In Switzerland, too, blockchain projects are attracting investor money. Among the beneficiaries, SEBA Bank and Sygnum Bank, two Swiss cryptobanks, recently raised $200 million following their 2019 banking licenses from FINMA.

" It's the emergence of a new, expanded and decentralized corporate governance, made possible by distributed technology."

These companies specialize in the trading of digital assets (blockchain-compliant shares and financial instruments). For example, SEBA has launched the first digital tokens that allow you to own physical gold in digital form, while Sygnum has carried out a similar operation to tokenize a Picasso painting.

A Geneva-based company in the starting-blocks

Another player to join the revolution is MagicTomato. The leading fresh produce delivery company in French-speaking Switzerland, MagicTomato was founded on trust between its customers and the artisans who supply their quality products. Using decentralized blockchain technology, it has opened up its capital to enable its thousands of customers and artisan suppliers to become direct shareholders in the company. MagicTomato is thus creating a highly innovative model of community governance and collective ownership.

The results of this digital share sale far exceeded expectations for a rather traditional company. With the help of industry leaders, Geneva-based blockchain specialist Taurus and law firm Lenz & Staehlelin, MagicTomato used the latest Swiss blockchaintechnology and regulatorydevelopments toopen up its capital and drive growth.

This investment model promises to enable consumers and craftsmen to become players in an economy that's just like them. It's the emergence of a new form of corporate governance, broadened and decentralized, made possible by distributed technology. Following in its footsteps, Vaud-based QoQa has followed the same path, reaching out to its engaged and in-demand community.

However, the digitization of shares is not a substitute for listing on traditional stock markets, which are difficult to replace, but rather a complementary method in which share ownership is open to longer-term investments made both to benefit from financial interest, and to contribute to the company's growth through direct shareholding.

Expected draught

It should be borne in mind that, although the resale of digital shares via a secondary market exists and is developing, it is still relatively complex. However, this is less of an issue given the different nature of the buyers of these shares, who are generally not financial players and focus on the company's long-term development.

MagicTomato and QoQa have paved the way by identifying the enormous potential for success and change enabled by widespread shareholding. Expect more companies to follow.

Source : Bilan.ch