[Case Study] How Digital Securities By ADDX Are Changing Corporate Finance

How Digital Securities By ADDX Are Changing Corporate Finance

Digital commercial papers are similar to traditional ones, but with a twist – they are issued using blockchain and smart contract technology, making them more efficient to administer. They represent one application of digital securities, an innovation that is quickly catching on in the capital markets and is now being used in a wide range of issuances, including that of equity, bonds and fund units.

In April 2021, one of the earliest digital commercial papers in Asia was issued by financial services provider CGS-CIMB Securities (Singapore) Pte. Ltd. (“CGS-CIMB”) on the private market exchange ADDX. CGS-CIMB established a SGD150-million programme. The first tranche of approximately SGD10 million raised capital from both individual and corporate accredited investors, via a three-month paper. Taurus Point Capital was the adviser to CGS-CIMB for this issuance.

This case study examines what digital commercial papers are, what gap they fill in the current corporate financing landscape, as well as the long-term implications if this instrument becomes widely accepted among issuers and investors.

ADDX is your entry into private market investing. It lets you invest in private equities, hedge funds, unicorns, and other private market opportunities. We've even made them accessible at a far lower entry cost.

Private markets have long excluded most people. We don't think that's fair, and we're here to change that.

If we succeed in building a financial market that allows capital to flow freely through equal access to investors, we have a shot at creating a world where everybody can access financial ecosystems – easily, fairly, and safely.