Fasset, a UK-headquartered fintech company, has launched the world’s first comprehensive operating system dedicated to the ethical financing of sustainable infrastructure on the Ethereum blockchain.
Inspired by the UN’s Sustainable Development Goals (SDGs), Fasset hopes to expedite the construction of sustainable infrastructure while providing safe, secure, and yielding investments to a broader investor base. This is in response to increasingly pronounced climate degradation and a clear lack of capital entering the sustainable infrastructure sector—estimated by the World Economic Forum to be moving towards a US$15 trillion deficit by 2040.
Founded in early 2019, Fasset has already amassed more than US$4.7 million raised from strategic backers in the UAE, Saudi Arabia, Bahrain, Kuwait and Singapore. The company aims to bridge the physical, financial, and digital worlds to create and offer a new asset class to all types of investors—“Hard Asset Tokens”, which are digital representations of infrastructure assets, such as solar farms or fiber optic networks. The platform uses blockchain technology to fractionalise these large, previously illiquid assets, representing these "pieces" digitally—similar to traditional stocks in a company representing fractional ownership. As a result, these previously unavailable and unlisted assets become highly liquid, more accessible, and easily tradable—allowing retail and institutional investors seeking to diversify their digital portfolios to invest in a low-risk, highly-resilient, yielding and liquid asset class.
Mohammad Raafi Hossain, Fasset Chief Executive Officer and former Technology Advisor to the UAE Prime Minister’s Office, says: “With climate change expected to cost the world economy US$7.9 trillion by 2050, impacting lives and communities, the need for sustainable infrastructure has never been more urgent. In addition, the COVID-19 pandemic has placed the global economy at a standstill with massive job losses and markets tumbling around the world. The most direct and effective way to accelerate the production of large-scale sustainable infrastructure projects—and in turn, create sustainable jobs for the global economy—is through hard asset tokenisation and the democratising access to these investments. We believe that there is, today, an unprecedented opportunity to equalise the global economy while creating sustainable jobs and fighting climate change—and the time to seize it is now.”
This need for sustainable infrastructure funding is global—while emerging markets are looking to keep pace with urbanisation, developed markets must upgrade deteriorating infrastructure. Meanwhile, as of the end of 2019, US$11 trillion in negative yielding bonds are being held. This gross mismatch in capital creates a unique opportunity for the private sector in its desperate search of high quality assets. However, private sector investors face a cumbersome and inefficient process in financing infrastructure, with issues such as:
· Low Levels of Liquidity: Though private infrastructure funds exist, investors have limited exit options and are unable to construct portfolios with optionality;
· Large Ticket Sizes: Only the largest investors can access infrastructure investment opportunities due to the magnitude of the investment;
· Lack Of Optionality: The nature of illiquidity inhibits optimal portfolio construction, limiting asset diversification opportunities;
· High Costs and Fees: Layers of intermediation and a lack of direct investment opportunities lead to higher costs and fees for investors.
To address these issues, which have ultimately limited capital inflows to sustainable infrastructure projects on a global level, Fasset introduces the first of its two flagship products—the Fasset Enterprise Platform (FEP)—aimed at providing tokenisation services to any hard asset owners looking to tokenise their assets for fundraising purposes. By moving the entire sustainable infrastructure financing process to the blockchain, Fasset enables a wider investor audience to get exposure to assets that were previously illiquid, inaccessible, and had high barriers to entry. At the same time, asset owners can bypass costly middlemen to directly list their assets on an exchange, gain faster access to liquidity and court a wider base of like-minded investors. Fasset will also be launching a regulated exchange for hard assets in the near future.