Fineqia leaps into crypto, AI, blockchain and the next generation of the internet

After a period of building by stealth, Fineqia International Inc (CSE:FNQ, OTC:FNQQF) is starting to make itself visible.

In some ways, that puts the digital asset and fintech investment business on a similar footing to the disruptive sectors in which it operates.

Having lurked among obscure corners of the Twittersphere and buried beneath layers of jargon-rich technical white papers, Web3 technology is slowly but surely creeping into the mainstream.

Earlier this month, none other than the world’s largest bank JPMorgan Chase & Co (NYSE:JPM) broke new ground in the commercial blockchain space by facilitating a tokenised trade between BlackRock and Barclays.

Bitcoin itself is coming closer to being a market-traded asset class if BlackRock’s, Ark Invest’s and Grayscale’s ambitions see the light of day.

It is in this climate that Canada-listed Fineqia has built out a multilayered investment thesis combining an investment portfolio of listed next-generation tech stocks and a basket of private company and token investments.

Both sides of Fineqia’s coin have different risk profiles and different return calculations, no doubt a hedge against the inevitable dips and resurgences in sentiment in the still-young Web3 sector.

Operationally speaking, Fineqia is London-based, though management opted for a listing on the Canadian Securities Exchange, a North American growth engine akin to AIM in the UK.

Fineqia also has a subsidiary based in Liechtenstein where its exchange-traded note (ETN) offering is provided (more on that later).

Chief executive Bundeep Singh Rangar further explained the business model in a chat with Proactive: “We’re like a combination of being a listed venture fund but also a listed company that has non-venture related businesses that are also revenue generating.”

Regardless, the net result for prospective investors is the same: “Fee streams from management fees, assets-under-management fees, carried interest and performance fees should all flow to the top for shareholders, transitioning Fineqia International into a revenue-generating and profitable business."

Fineqia teams up with FTSE Russell

In the coming months, Fineqia intends to strengthen its relationship with global index provider FTSE Russell, having signed a binding agreement this April.

“This is great from an institutional optics perspective because it's a credible partner,” noted Rangar.

Together, they intend to bring a new, innovative exchange-traded note (ETN) product to the market focused on cryptocurrency-based fixed-income revenue streams

While this already sounds innovative in itself, Fineqia wants to differentiate itself further.

Rangar explained: “What we really want to be different about is generating yield not just from cryptocurrency staking, which some of the players in this space are already doing, but from decentralised finance (DeFi) protocols which generate a higher yield.”

The group primarily focuses on blue-chip, top-ten cryptocurrencies like Solana (SOL) to generate returns, while the innovative use of DeFi is being tapped in order to compound these yields.

After all, as Rangar pointed out, “to be competitive in this space, you gotta have higher yields, but ensuring this is done so via sound risk management!”

Fineqia already has the market makers, custodians, trustees and lawyers in place, as well as a commitment of seed AuM, to launch the product.

The final hurdle will be securing regulatory approval in Europe, where Fineqia has already applied to two exchanges.

Applying in Europe was a no-brainer for Fineqia, given the continent’s more welcoming approach to cryptocurrency under new Markets in Crypto-assets (MiCA) legislation, at a time when US regulators remain steadfastly hawkish on next-generation financial products.

“We've got all the infrastructure and all the plumbing in place to go live as soon as we get approval from the exchange listings,” Rangar affirmed.

If all this talk of crypto staking and DeFi is sending your head into a spin, that’s sort of the point of a company like Fineqia.

Just like traditional financial products, DeFi investing is complicated. It’s for this very reason that more and more institutions, be that BlackRock or Fineqia, want to make it easier for the average investor to gain access to these asset classes.

It’s infinitely easier to hold a few shares in your portfolio and letting someone else deal with all the faff, after all.

From Web3 to Web 4.0

In discussions, Rangar referred to the private investment side of the business as a Web4 fund, but what is that?

If you think of Web 1.0, it was all about the internet. When the Web 2.0 age we live in came around, it was all about building an e-commerce layer on top, making it more dynamic and more interactive.

It’s safe to say that the Web3 concept, encompassing crypto and blockchain technology, NFTs and metaverses, has been slow on the uptake. ‘A solution in search of a problem’, as some have called it.

But for Rangar, the future of the web rests with meshing these Web3 innovations with the new wave of artificial intelligence (AI) and augmented reality (AR).

“The next layer of innovation will be building on these existing technologies, finding a valid market with a clear business or communications purpose. The thesis of that will be interoperability and seamless interaction between humans and the web. This is where Fineqia will be at the forefront of Web 4.0,” explained Rangar.

He speaks of innovative portfolio investments like a metaverse-based music label affiliated with big-name British producers (sadly he opted out of namedropping just who this might be).

These are the businesses Fineqia is seeking out and investing in.

Again, the industries are complex and sometimes daunting, but as an investor, your only job is to let Fineqia put your money to work investing in the next generation of the internet.