Graham Rodford, founder and CEO at Archax, an institutional-grade exchange for asset-based tokens, discussed recent developments in the space and growth prospects with Benzinga.
About Graham Rodford
Rodford previously worked for Omni Partners, HSBC Holdings plc HSBC and other institutions in finance and operations roles. His core focus is helping develop an institutional investment solution for tokenized assets.
About Archax
The founders at London-based Archax became interested in cryptocurrencies around 2013, Rodford said.
After the market picked up in 2017, the CEO and others attempted to launch a fund, but “the market infrastructure wasn’t there,” he said.
The founding team decided to build an institutional market infrastructure and started by acquiring high-level talent in the financial services space, Rodford said.
To increase their credibility, the founders “tried to make everything look as institutional as possible, from front to back,” and added team members like David Lester, formerly of the London Stock Exchange.
The goal is to democratize capital markets, Rodford said.
Platform Access
“The definition of institution, in the crypto world, is very different from what it would have meant in my old world,” the CEO told Benzinga.
Traditionally, institutions were regarded as pension funds, endowments, insurance companies and asset managers, he said. Today, the tide has shifted, Rodford said: hedge funds, corporations and accredited investors demand access to a “regulated marketplace with as many sophisticated players as possible.”
Archax plans to face institutions initially and to later launch its own retail client-facing brokerage that allows access to its exchange, he said.
Partnerships
“Partnerships are one of the best ways for this whole space to develop,” Rodford said.
Partners “are looking for venues that they think are institutional and credible, such that if they market their tokens to investors, that they are comfortable that they will be able to trade in a sophisticated way."
Archax has been working with Aquis, an innovation-focused equities trading mulilateral trading facility, to scale operations.
Aquis' technology is durable and attractive, the Archax CEO said, as it can withstand huge volumes and is used by major industry players.
Regulation
“When you’ve been working in a regulated environment your whole career, you kind of get used to having checks and balances; you get used to operating in a clear and fair way; you get used to what the [Financial Conduct Authority] overall requirements are in terms of operating in the market,” Rodford said.
Archax recently applied to be an MTF with the FCA; “our application went in March of this year. We were the first. We still think that we are the first,” he said.
Regulatory authorities have been very thorough and supportive in addressing Archax’s requests, the CEO said.
Next Steps
The first step to integrating all assets on blockchain is to properly evolve the market, in Archax's view. This means that mature regulations and market infrastructure are key to increasing adoption.
The movement will graduate from small, illiquid, companies issuing security tokens to adoption by blue chips, market infrastructure companies and organizations higher up the liquidity structure, Rodford said.
"In 10 years time, I think it will be part of the world."
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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