Coming full circle: Square seeks ASX listing with acquisition of Afterpay
The Australian Stock Exchange (ASX) has not been viewed as friendly towards digital currency, most recently having the embarrassing situation of Aminoca Brands reaching a AUD$1B valuation after being removed from the bourse in March last year.
That approach may need to change swiftly, with fintech giant Square preparing for a dual-listing in connection with their acquisition of market-darling Afterpay. Square’s market capitalisation exceeds USD$150 billion which could make it the second largest company traded on the ASX behind BHB and ahead of every single banking sector stock.
The ASX will be unlikely to block a listing of the size of Square, despite having reservations about digital currency and digital asset listings, and there is no sign that Square will be reducing their involvement in the digital currency space. Square has reported an increase in Bitcoin revenues by 200 per cent year-on-year for the quarter and owns reserves in 8,027 Bitcoin, with plans to increase their holdings. Additional ASX listed companies with digital asset business lines are inevitable.
Central to the merger is the unification of Afterpay’s 15 million US customers and the millions of merchants who use Square’s payments products. Square may be planning to integrate Afterpay’s network into Square's Cash App product, which also allows US and UK users to trade in shares and Bitcoin, receive and send payments and operate outside of traditional banking infrastructure, avoiding fees and moving value faster.
Writing in today's Australian Financial Review, leading venture capitalist Martin Rogers said:
Square’s vision is based in part on the new technology of bitcoin, cryptocurrencies and squeezing out the establishment credit card companies in the favour of its own ecosystem.
Mr Rogers also identified that while the ongoing Senate Select Committee into Australia as a Technology and Financial Centre has been taking testimony on how traditional banks are debanking digital currency companies without providing any adequate reasons:
disruption is set to continue with ... technology offer[ing] an opportunity to reimagine our financial system that can and should work in our hyper-connected smartphone era.
Square's listing will be closely watched as it will give an indication of what, if any, modifications or assurances the ASX will seek from Square around their digital currency lines, and how the ASX may warm up to other digital currency centric businesses.