From almost defaulting on a $400,000 loan to now in the process of securing a $325 million investment deal, RCL Chemical might be turning the tides on their misfortune. Although there have been quite a number of stories about blockchain-powered cities of late, this might be the first time that cryptocurrency is being used to fund a key infrastructure project.
From Broke to Crypto-Woke
In Kentucky’s quest to kickstart their economy, a $400,000 loan was granted to RCL Chemical, an energy company focused on industrial plants, to build a facility in Eastern Kentucky and bring hundreds of jobs back to the area. Unfortunately, the project didn’t fare too well, and after moving its location two years in and bleeding their reserves dry, RCL was on their last limb.
However, back in May, the company struck a deal with Y2X Infrastructure in order to both raise an absurd sum of $325 million for the project and pay the county back with interest. As a gesture of good will, RCL was able to produce an initial payment of $50,000 against the loan, which was funded through cryptocurrency. After nearly going bankrupt, RCL is now on track to create their facility with over 800 times the amount of capital – which seems like a recipe for disaster.
Y2X, which plans on having their own token sale for the low sum of $200 million, is attempting to tackle the sector of security token offerings – a growing trend in cryptocurrency. Their token is set to grant token holders returns based on the companies that Y2X invests in, such as RCL Chemical. Although their website mentions that they ensure full compliance when it comes to securities issuance in the United States, no data can be found on the company yet regarding any formal filing with the SEC.
A Securitized Future
As a new wave of Initial Coin Offerings featuring security tokens begins to emerge, more projects and companies might bank on the method’s current hype-cycle as an alternative way of raising capital. Security tokens differ from utility tokens in that they aren’t transactional, and encompass the true nature of a security – whether it be through equity, governance, dividends, or asset representation.
Although nascent, securities token exchanges have begun to be built by companies such as tZERO, Templum, and OpenFinance. On the generation side, companies such as Securitize, Polymath, and Harbor have taken the plunge in navigating the compliance requirements for securities token creation and transference. But with more mainstream companies like Coinbase slowly opening the door to securities token trading, liquidity is sure to exist within these markets sooner than originally thought.