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SEC-Regulated Hyperion Exchange to List Precious Metal-Backed Stablecoins
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According to a recent announcement on September 27th, the SEC-regulated Hyperion Exchange has signed a Memorandum of Understanding with the intent to list precious-metal backed stablecoins offered by the Kinesis Monetary System.
Hyperion’s Goal of Regulatory Compliance
Founded in 2017, the Canadian-based Hyperion Exchange has made regulatory compliance a priority. Not only are they regulated by the SEC, but also by the US Financial Industry Regulatory Authority, and the non-profit Securities Investor Protection Corporation.
Recent comments made by Michael Zavet, Hyperion’s CEO, reflect their preparation for future regulatory enforcement.
“Hyperion is a unique exchange that lists securities tokens, financial securities backed by tangible physical assets, on the blockchain. At Hyperion, we are committed to ensuring best practice in regulatory compliance, listing tokens only after comprehensive verification checks.”
It is likely such regulatory compliance which caught the attention of Kinesis, and their gold and silver backed digital currencies, otherwise known as stablecoins.
Stablecoins as a Reliable Alternative to Both Fiat and Volatile Cryptocurrencies
The popularity of Stablecoins is relatively new. Though the first project went live in 2014, a recent surge of Stablecoins throughout 2018 has likely been the result of the early 2018 Bitcoin crash, which brought down the larger digital currency market with it.
Stablecoins aim to bring stability to the frequently volatile cryptocurrency markets. Kinesis has utilized the commodities of gold and silver to promote such stability.
They have physical gold (KAU) and silver (KAG) secured in seven volts throughout the world: Sydney, Singapore, Hong-Kong, Dubai, Zurich, London, and New York. Such precious metals are digitalized on the blockchain, and can then be sent, traded, or even spent— using the Stellar blockchain— with a Kinesis debit card.
Ultimately, stablecoins offer the ability to exchange an asset-backed, relatively stable digital currency. Traders who want to escape the volatile cryptocurrency markets without turning to traditional fiat, can turn to stablecoins as offered by Kinesis.
The Implications of Increased Liquidity for Asset-Backed Stablecoins
The Memorandum of Understanding suggests a future listing of the Kinesis stablecoins on the Hyperion Exchange. It will allow for the Kinesis stablecoins to be available for exchange, as well as the Kinesis Velocity Token (KVT), which receives a portion of the transaction fees associated with the Kinesis Monetary System.
The new listing will bring added liquidity to the Kinesis digital currencies. As put forth by Ryan Case, the CCO of Kinesis Money,
“Accredited investors on the Hyperion Exchange looking for a secure store of value and access to liquidity can now benefit from being able to trade from volatile cryptocurrency positions into the age-old reliability of gold and silver, in the form of the KAU and KAG currencies. […] Having sold in excess of US$50 million worth of Kinesis Velocity Tokens, we are also delighted to give eligible participants access to liquidity on their investments and allow for new participation in the Kinesis Monetary System.”
Zavet, Hyperion’s CEO, made additional remarks concerning the compatibility of Hyperion and the currencies offered by Kinesis.
“Kinesis’s unique vision to digitise gold and silver on the blockchain, with physical 1:1 allocation to the underlying assets, makes it a perfect stablecoin fit for our platform and we are pleased to host both Kinesis Money digital currencies on our exchange, as well as their Kinesis Velocity Token. Being licensed to offer trade in security tokens positions Hyperion as the perfect platform to ensure investor and regulator confidence.”
What do such partnerships say about the movement towards Securities Tokens? Will other types of asset-backed securities offer appealing solutions to the volatility of cryptocurrencies? Let us know what you think in the comments below.
Image courtesy of Bitcoin Exchange Guide.
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Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
