This weekend saw the launch in Macau of Micro Connect Financial Assets Exchange (MCEX), a blockchain powered exchange founded by Charles Li, former CEO of HKEX, and backed by the venture arm of the Agricultural Bank of China and Li Ka-shing’s Horizons Ventures. Using a novel digital asset, Micro Connect provides financing for Chinese micro and small businesses, particularly consumer facing businesses such as restaurants, retail stores and sports clubs.
A Daily Revenue Obligations (DRO) represents rights to income from the SME, with funding repaid through the daily tracked revenues via point of sale (POS) solutions and banking data. Hence there is significant transparency about the performance of the DROs. Investment in these small firms started long before the launch of the exchange, with funding of more than $120 million for 2,900 stores across 200 brands. That last point highlights that the quick route to rollout is to target brands rather than single unit businesses.
Blockchain is used for the trading, settlement and clearing of DROs.
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