World-first in digital asset exchange, Abacas™ enables Asset Managers to unlock the value of static assets and trade these. Abacas™ brings Asset Management and Fintech together into a single clean delivery model – a digital asset and digital currency in one. Abacas™ is a truly asset-backed digital currency that promotes transparency and trust.
Assets Backed by Custody (ABC) marks a significant step beyond digital currencies. Digital assets are hard-wired to physical assets so the intrinsic value of the digital asset will always equal the value of the physical asset. With ABCs, Asset Managers can exchange assets in just one single transaction, for example, buy UK stocks using Gold. Prior to Abacas™, this process would take up to three transactions and up to two fund transfers, each incurring a fee. To illustrate, sell the Gold for USD; sell the USD for Sterling and finally use the Sterling to buy the UK stocks.
Abacas™ is a world-first in digital asset exchange and the world’s first fully cloud-based exchange. Never before has there been an exchange that facilitates direct asset-for-asset trades. In addition to this, Abacas™ provides radical new trading opportunities; direct asset-for-asset trading, asset-backed payments and the ability to trade seamlessly across asset classes.
Abacas™ provides powerful solutions for Asset Managers across four key areas; risk mitigation, operational efficiency, cost reduction and revenue growth. Asset Managers provide professional investment services for their clients and operational distraction obstructs this objective, impacting the bottom line. Abacas™ offers a solution to the two principle challenges facing the asset management industry – trust and transparency and the delivery of cost-effective technology.
 Top Issues Facing Asset Managers, PricewaterhouseCoopers. April 2012
No. Abacas™ is not creating a fiat currency. Digital Assets are Backed by Custody and are currency and asset, in one.
The ABCs constantly track the underlying value of the physical asset as traded in the physical market. The Abacas™ ecosystem posts that value ongoing.
The Trust holds baskets of securities (board lots of shares, ounces of gold etc.) and Abacas™ manufactures coin series of digital assets that are uniquely coded, aligning the coin series to the physical assets. It is possible for the Asset Manager to port assets into the ecosystem against which Abacas™ will manufacture coins that align to the physical assets.
With Abacas™, clients don’t need to worry which specific asset is theirs. Because assets are pooled, Asset Managers simply need to know how much of the coin series belongs to them. This improves their asset portability while retaining their stake in their coin series. Of course, all assets, physical and digital, are audited and reconciled ongoing.
Abacas™ is a different model entirely. Others who claim asset-backing often expose the client to counterparty risk with the coin purveyor, collateral risk with non-approved and substandard custodians or operational risk with inadequate procedural controls. Abacas™, as an exchange, never controls the underlying physical asset and our trustee manages all transactions with approved and recognised global custodians. Furthermore, Abacas™ is in a very unique competitive position given that it is creating a marketplace for universal fungibility – a bridge between the physical asset world and the digital payments world.
Trading digitally with Abacas™ enables Asset Managers to access to a larger source of liquidity, especially powerful because Asset-Backed Coins (ABCs) cannot be rehypothecated. Abacas™ provides powerful solutions for Asset Managers across four key areas; risk mitigation, operational efficiency, cost reduction and revenue growth.
The asset in Trust is controlled by the fiduciary agent, the trustee. However, the trustee can never act in contravention of the Trust Instrument, thereby protecting the asset manager’s right of repatriation of the Asset-Backed Coins (ABCs) he holds. As an exchange, Abacas™ can never control the physical ownership of the assets committed to the exchange.
Abacas™ never independently values any asset. Abacas™ is solely an exchange. However, because a digital asset is hard-wired to a physical asset, the intrinsic value of the digital asset will always equal the value of the physical asset. In the case of a single asset, price discovery is ongoing using a real time data feed (RTDF).
Abacas™ never independently values any asset. Abacas™ is solely an exchange. However, because a digital asset is hard-wired to a physical asset, the intrinsic value of the digital asset will always equal the value of the physical asset. In the case of a ‘basket’ of assets, price discovery is ongoing using a real time data feed (RTDF) and the physical asset composition of the coin.
On initial striking of an ABC, the value will be in the range of 1000 – 1400 in the native currency of the asset. This will allow coins to be struck with whole number quantities of shares or ounces or currency units for ease of use.
The Abacas™ asset-for-asset transaction model is such that a liquidity provider is simultaneously a liquidity remover. As such, “order flow rebates” and rebate arbitrage (gaming), common practices in High Frequency Trading, are not possible, further levelling the playing field. Abacas™ removes the incentives for High Frequency Trading and order flow manipulation. The Abacas™ Exchange is specifically designed for Asset Managers
The financial markets are riddled with fragmentation, reduced liquidity and high frequency trading. Abacas™ offers a solution to these problems. Abacas™ is a timely addition to the Fintech arena for challenger products because it represents an opportunity to redefine the tools and processes in traditional financial frameworks.
Abacas™ is fully regulated within the jurisdictions of incorporation and operation. In tandem with this, the Abacas™ team faithfully administers its responsibilities in respect of good governance, self-regulation, best practices and regulatory compliance.
Abacas™ transparently approached key regulatory bodies well in advance of initiating our software build to share our business model and our development roadmap and to assess the compliance and regulatory requirements. Further to this, Abacas™ has formally engaged a compliance consultancy to validate results of our inquiries. To date, Abacas™ has received two tacit approvals of the model from key regulators; two tacit approvals from self-regulatory bodies; and an endorsement from the Asset Management community. Abacas™ operating entity will be governed by the Financial Conduct Authority (FCA) and the company will continue to work with regulators throughout the build.
Powered by Fintech advancements, Abacas™ will level the playing field, improve liquidity and reduce transactional friction for the Asset Manager, while creating a sustainable, extensible and profitable business model.
Abacas™ is world-first in digital asset exchange and the world’s first fully cloud-based exchange. Based on Microsoft’s Azure Cloud, the Abacas™ Exchange is a highly secure cloud service using the latest web technologies to provide real-time access to Trading, Positions and Account Activity via desktop browsers, PDAs and smart phones. Leveraging the application fabric of the Azure Cloud, Abacas™ scales dynamically by geographic region to high trading volume in times of market stress and volatility.
The Abacas™ Exchange and Asset-Backed Coins (ABCs) have been developed by Abacas™ – the digital assets company. Abacas™ currently operates from London, with a software team in Philadelphia. For further information about the team behind Abacas™ visit www.abacas.global.
Currently in beta phase, the Abacas™ exchange will launch in 2018. If you are an Asset Manager and would like to be one of the first to have access to the product, please make contact at www.abacas.global.
For further information please contact
Sarah Shilling, Head of Communications
Tel: + 44 (0) 7815 091758