Blockchain dividend distributions emerge as latest threat to traditional finance

Blockchain technology is changing the way dividends are distributed, marking the latest stage of innovation in the digital currency space.

The INX Digital Co., a broker-dealer, has facilitated the first security token dividend distribution on its platform using blockchain technology.

“It’s an exciting example of the versatility of blockchain technology,” said Ric Edelman, founder of Digital Assets Council of Financial Professionals.

“While it might seem unnecessary to develop a new way to distribute a dividend, this innovation will result in lower costs for companies and faster access to money for shareholders,” Edelman said. “INX’s news might seem strange today, but this type of transaction will be commonplace in the future. It’s yet another threat to today’s banking infrastructure.”

HCC Info Tech Ltd., the issuer of Trucpal Tokens, is leveraging INX’s SEC-registered transfer agent solution to distribute dividends on the blockchain in the form of stablecoins.

“Trucpal’s first dividend distribution to its investors is a full circle moment for the INX team, and an implementation of the company’s vision to allow true democratization of finance,” said INX Chief Executive Itai Avneri.

Tyrone Ross, co-founder and chief executive of Turnqey Labs, said he's not surprised to see blockchain and digital currency used in this manner.

“It makes sense,” Ross said. “They’re basically using a registered securities token and issuing it to token holders as a dividend using Ethereum.”

Ross said he first saw a blockchain-enabled distribution a few years ago when digital security manager Securitize, a blockchain-based transfer agent, delivered a royalty payment to holders of one of its issuer’s security token.