Categories: EducationFAQ

What Is Finhaven?

There seems to be a growing demand for global securities issuance platforms and exchange opportunities. As of right now, few companies actually provide such services, which means we will see a fair few companies tackle this business model moving forward. Finhaven is one of those companies that may be worth keeping an eye on.

What does Finhaven Offer?

In a nutshell, Finhaven uses blockchain technology to make it easier, cheaper, and more secure for projects and companies to raise capital and trade tokenized securities. The latter aspect is particularly interesting, as anything related to securities will undoubtedly attract attention from the SEC at some point.

Even so, Finhaven will gladly explore these opportunities in combination with blockchain technology. More specifically, it wants to provide a global exchange that is in regulatory compliance. Its features include equity and debt issuance on the blockchain, tokenized securities, smart contract governance/settlement, and portfolio management tools. All of this is achieved through an intriguing mix of Bitcoin’s blockchain technology and the smart contract technology provided by Ethereum.

The decision to utilize two layers is pretty easy to explain. The Bitcoin blockchain is used to power the remittance layer of Finhaven, as investors will accumulate BTC as the return on their investments. The Ethereum smart contracts are used to issue the regulated security tokens, help secure portfolio wallets, and establish an audit layer which has an immutable record of all transactions. Bringing together the best of both worlds is pretty intriguing.

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While Finhaven sounds like a powerful platform, a lot of people will be curious about its regulatory compliance. It seems the company will collaborate with regulators and the blockchain community to create a new token standard for regulatory compliance. Issuing securities on the blockchain is a double-edged sword right now, as the SEC is actively cracking down on anything related to securities. If Finhaven takes the proper steps in this regard, the future for this type of business venture may look pretty bright. Only time will tell how this situation unfolds, though.

For the time being, blockchain technology hasn’t made much of an impact in the capital markets. Whether or not Finhaven can be the catalyst to drive this change remains to be determined. The benefits of reducing costs, building a global capital marketplace, and converging intermediaries are certainly significant. At the same time, disrupting the current model of capital markets will not be all that easy.

It will certainly be interesting to see what it looks like when automated compliance and smart contract validation come together. Tokenizing securities seems to be the next logical evolution in the financial sector, even though the concept is very different from what people are used to. It’s always good to see new approaches to issuing securities; that much is evident.

JP Buntinx

JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

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