Despite the presence of 27.5 million companies, less than ten thousand have access to open markets with price discovery (a process of determining the prices of assets in a marketplace through the interactions of buyers and sellers). This is less than three per ten thousand. The overall funding gap for them is estimated at us$1.2 trillion, making it the second-largest in the world after East Asia. Something is not working, and it is clear that needs to change. We are determined to address this problem using blockchain technology to offer a simpler, faster, cheaper, and safer infrastructure that can enable markets to flourish. This, in turn, will allow millions of companies to access the capital market, and hundreds of millions of people to invest for their future.
Moreover, can capital markets serve as a solution to tackle poverty, consolidate greater economic freedom, and promote better democracies worldwide? The United Nations thinks so. In 2015, the UN Member States adopted the 2030 Agenda for Sustainable Development, a shared blueprint for peace and prosperity for people and the planet. The Agenda includes 17 goals (the Sustainable Development Goals) and 169 targets aimed at ending poverty, improving health and education, and spurring economic growth while tackling climate change and preserving our oceans and forests. One of these goals is related to access to capital markets, which can enable people and businesses, particularly small and medium-sized enterprises (SMEs), to escape poverty and improve their lives.
The World Economic Forum reports that SMEs represent around 90% of all businesses worldwide, provide roughly 70% of all employment, and contribute up to 70% of global GDP. Despite their significant impact on the global economy, many people and businesses around the world lack access to financial tools and a bank account. Fortunately, fintechs are working to address this problem of financial inclusion. However, another problem remains for millions of SMEs that need capital to grow and create jobs, and for billions of people who need to invest in their future. Capital is the solution, but the current capital market does not work for small capitals and low investment amounts. Why?
In traditional capital markets, barriers to financial inclusion are prevalent, particularly for SMEs. These businesses lack the size necessary to issue financial instruments, making it difficult for them to receive long-term capital or access to financial instruments to solve their basic financial needs. While financial market infrastructures (FMIs) and intermediaries have been extraordinarily efficient in creating capital markets for large corporations, they have failed to extend the same level of support to SMEs. This is due to a cost structure problem, as SMEs are not considered attractive issuers in either developed or developing markets.
Additionally, millions of people around the world are unable to access to financial tools to plan for their future due to various barriers such as the necessary documentation for opening an account, the distance required to access qualified advisors, and inadequate income levels. However, the emergence of distributed ledger technology (DLT) has presented a clear solution to this problem. DLT, including both centralized (CeFi) and decentralized (DeFi) infrastructures, has the potential to bridge the gap in access to capital markets. The blockchain-based financial market infrastructure can allow SMEs to access capital market products and services traditionally only available to large corporations. This could significantly improve their ability to grow, create jobs, and generate wealth. Moreover, using DLT technology would enable businesses and individuals to exchange value without transaction fees and with simplified transaction processing and documentation.
While CeFi and DeFi infrastructure continue to evolve, offering increasingly complex services such as lending, collateral exchange, and the issuance and trading of primary and secondary digital assets, challenges still exist. This is our mission, to provide the infrastructure necessary for financial inclusion and meaningful change in the capital markets. The founders, investors, and employees are committed to making capital markets simple for all. We are excited to see the impact this technology could have on people and businesses around the world. By expanding capital markets, we hope to make significant strides towards ending poverty, improving health and education, spurring economic growth, and preserving the environment.
We simply cannot accept the status quo and that by 2030 capital markets are not truly for all. We need to be rebels and create “capital markets 3.0” by using blockchain technology to leapfrog infrastructure, build better financial markets, and push the industry forward. If we achieve our goal, by 2030 we will have simpler capital markets for millions of businesses and people around the world, providing them with the capital to grow, create jobs, and wealth, while consolidating economic freedom and more and better democracies in the world.
This mission will help align everyone behind a common goal and attract the right people and partners to the Company. If you share this passion, we invite you to reach out and learn more about our culture and available positions on the MarketXM Careers page.