Why Create The R- Token Platform
With over a thousand currencies and counting, it is safe to say that we have more cryptocurrencies and tokens than we need. Still, Harbor wants to tokenize private securities on its regulation compliant platform. It’s called R- Token and here are two reasons why this is necessary.
Regulators have been breathing down the neck of ICO teams for issuing what they consider as securities tokens to the public. Not all these ICOs are fraudulent. Some are willing to comply with laws and are looking for ways to do so. The tokenization of private securities on the Harbor blockchain for instance, would lift the burden of meeting certain regulatory requirements off the shoulders of honest innovators. This is because, their blockchain and the transactions on it would be set up to automatically meet requirements like Anti- Money Laundering (AML) and Know Your Customer (KYC). This is one reason for coming out with R- Token.
Another reason is that, having assets traded on the blockchain means more liquidity and less requirements of trust. Harbor’s R- Token whitepaper rightly states that blockchain technology simplifies the transfer of ownership, creates transparency, reduces administrative burden, and provides opportunity for greater liquidity.
More On R- Token
One advantage of private companies over public companies is that they have less regulatory requirements to follow. On the other hand, the securities of private companies can only be traded between a limited group of investors that are considered eligible based on the regulations of the jurisdiction in question. This creates some restrictions when it comes to secondary transfer of securities. Consequently, private issuing of shares foregoes more liquidity for less regulatory requirements.
The focus of Harbor’s platform would be on real estate assets initially. This makes sense because of the interest in the sector as well as the many regulations players in the sector have to navigate.
With the R- Token regulatory compliant platform, privately issued securities can also be liquid. This is because the tokens would be accessible to eligible investors on the blockchain. Issuers would no longer be burdened with avoiding the sale of securities to unqualified investors.
This is how it works with Harbor’s R- Token. Independent lawyers handle the checking of investors’ eligibility and keep records of them. Secondly, only trades that meet all the built-in requirements are valid on the blockchain. These legal requirements are built into the platform’s smart contract codes. Tax law requirements, KYC, AML are all taken care off.
The R- Token would be an ERC 20 token and thus compatible with the Ethereum Network.
Raising The Funds For The Project
The capital for Harbor’s project didn’t come from an ICO but from the traditional investment world. According to Techcrunch, about $40 million has been secured by Harbor so far. $10 million in February 2018 and another $28 million recently. Some of the notable investors contributing to this amount are Pantera Capital, Founders Fund and Andreessen Horowitz. The importance of the solution Harbor seeks to provide is reflected in the interest of the various investors.
With the funds secured for the project, eyes would be on Harbor in the run-up to the release of the R- Token in a couple of months. Beyond that, we would continue to follow how this new way of issuing securities tokens on blockchains in a regulation compliant manner develops.