Have you ever turned on the news and watched the financial section? Apple Inc., the maker of iPhone’s current stock price is hovering around USD 220, Google Class A stocks are touching USD 1200 and Amazon is even higher at 1900 odd Dollars. Has there ever been a slight regret that you should have bought the shares when they were cheaper, or that you might not ever be able to make it as big as heavy investors because you can’t afford to get a single share?
With major corporations running their business successfully, big investors are on the lookout to trade in for the shares and earn some heavy money through dividends. The even increasing stock value of successful companies mean that ordinary people, with not much of a big investment, cannot afford to buy these shares. Eventually, they are left to trade and transfer shares of little value and are effectively cut off from big stocks.
CDRX is a decentralized platform that has the perfect solution to the problem.
Crypto Depository Receipts
CDRX has created a depository receipt system, much like an ADR. Essentially this is a second tier tradable security that is backed by securities such as stocks and shares. Normally operated by banks, ADRs in turn represent the underlying securities.
These instruments allow even partial ownership of the underlying securities.
For example. A bank may buy a single stock of Apple Inc, (valued at around USD 220) and issue its own regulated DR, each one representing a portion of ownership of the Apple share. If the bank decides that 200 DRs should be issued, then each DR would represent USD 11 worth of the Apple share. This form of secondary issuance allows small investors, people who don’t have a lot of money, to buy the shares and become an owner (although a small one) to a company stock they would never afford otherwise.
Using the same traditional ADR method, CDRX offers users and small investors a chance to take part in owning and trading shares of big corporations.
Advantages of CDRs Over Other instruments
CDRX, although using the same principles as other DRs, offers some unique benefits that traditional ones do not have
The issues of regular ones does not lie in the DR methodology, but in the ecosystem. CDRX covers them:
- Trading is done through blockchain, increasing transaction speed.
- Transaction data is recorded in real-time, while a traditional central ledger is updated at large intervals,
- Voting is easy through the use of smart contracts embedded within the CDR.
- Dividends are automatically distributed through tokenization and smart contract.
- Transactional cost of trading is substantially reduced. Blockchain technology means that there is no need of a middleman and thus, no commissions are involved.
- In traditional DR trading and buying, investors are just given an upfront cost that they have to pay for obtaining the DRs. But, CDRX, since being based on blockchain, makes every transaction transparent.
The CDRX ecosystem is designed to allow CDRs to be bought and traded, and to issue new ones. While Crypto shares are subject to a lot of different interpretations of law and regulations the company is currently working on to incorporate them too.
Having an option for people to buy ownership of large corporations is game changer offered by CDRX. Yet, the idea is only good if there is a proper platform for the trading. To this effect, CDRX has its own exchange where it will allow not only trading and buying CDRs, but also crypto coins tokens and cryptocurrency instruments. The exchange will allow issuing new equities directly as tokens reducing the floatation cost.
In many jurisdictions, security tokens such as CDRs and other crypto shares (that grant legal rights to ownership of assets) can be traded through a registered and authorized organization. CDRX is working very closely with regulatory bodies to ensure that its exchange will be able to trade securities, but overall compliance with the law will bring clarity and stability to blockchain and cryptocurrency industry.
With USD 77.7 trillion stocks traded in 2017, the market has an immense potential to gain from adoption of blockchain. The technology, combined with the services of CDRX, allowing even the smallest of investor to have ownership rights in the biggest companies in the world, will change the landscape of financial trading forever.
Find out more on the website: https://cdrx.io/