The blockchain offers companies new financing opportunities. Simplify and streamline transactions while ensuring optimal security.
The cryptocurrency market is currently growing and offers an alternative to traditional financial transactions. It is based on the blockchain, that is technology for storing and transmitting information. She is safe and transparent, without a central control body. It also offers the possibility of setting up a tamper-proof database, containing the transaction history shared among all users. Result: more and more companies are interested in this technology for their financing operations “Previously, blockchain was rather reserved for innovative companies, but we’re looking at it right now standardization of this technology, which has spread and simplified“observes Florent Jacques, co-founder of Finkey, a company that advises and guides shareholders and managers in strategic decisions.
STOs are gaining ground
To finance companies, the blockchain can be used through two tools: Initial Coin Offerings (ICO) and Security Token Offerings (STO). “Funding in the form of ICOs is rather reserved for Web3 companies. Traditional companies will be more oriented towards STO”, says Florent Jacques. This device offers the possibility to finance a company in exchange for valid tokens on the cryptocurrency market. Companies that carry out an STO distribute securities that have the status of transferable securities, such as financial stocks, allowing investors to hold part of the company’s capital. “The STO can finance, for example, a real estate transaction or equity type activity “, illustrates Florent Jacques. From a regulatory perspective, the Financial Markets Authority (AMF) identifies STOs public offerings of financial securitiesS.. “For STOs of less than 8 million euros, the procedure is very accessible. Over 8 million euros, the regulatory framework becomes heavier”, says Florent Jacques. In the latter case, companies must in particular submit a document, called a “prospectus”, to the MFA.
Advantages for businesses
“An STO affects SMEs and ETIs as well as large groups. This allows direct access to investors, without a financial intermediary, as well as greater liquidity.”, points out the co-founder of Finkey. This system also facilitates international fundraising. “This type of investment remains complicated today. The STO allows you to break down barriers”, says Florent Jacques. The use of the blockchain also offers greater transparency of operations and actors, which makes transactions safer. However this form of financing is still quite marginal in French firms. “The technology is ready, but there are still no platforms to streamline these processes”, says Florent Jacques. According to the expert, this tool is expected to gain a lot in popularity in the coming years and may be compatible with other financing methods. “Banks should evolve and integrate this type of technology into their system. The use of blockchain in particular could be very relevant for small loans below € 5 million. This would allow banks to rationalize and use fewer resources on this type of operations “He explains.