Smartlands and the Ukraine International Commodity Exchange
November 17, 2021
Earlier this week, we were pleased to announce the signing of a partnership agreement between Smartlands and Ukraine’s oldest established and main commodity exchange, usually referred to by its initials as the UICE. With this article, I intend to give some background to the agreement and describe how it will benefit Smartlands moving forward.
But first, a little bit of history.
In its current form, the UICE has been in business for 27 years, during which it has carried out more than 80,000 auctions for commodities such as LPG, crude oil and condensate, bitumen, and countless other industrial products in addition to foreign exchange futures and stock derivatives.
Contracts House, home to the UICE in Kyiv’s Podil district
However, the history of the commodity exchange goes back much further than 27 years. There has been a commodity exchange in the Podil area of Kyiv located at Kontraktova Ploshcha since the 1700s; indeed, the name Kontraktova Ploshcha translates in English to Contract Square and remains one of Kyiv’s central business districts to this day.
Unfortunately for the earlier iteration of the exchange, the Podil area of Kyiv fell victim to a massive fire in 1811, which destroyed much of the original buildings around Kontraktova Ploshcha, including the original exchange, which was known in those days as Contracts House. A new building was planned in the years following the fire, and this was finally completed in 1817, featuring four Doric order columns at its entrance in the classical style. This building is today still known as Contracts House and is the home of the UICE and the physical trading floor where trading and auctions are carried out.
Today the UICE runs a similar business model to other commodity and futures exchanges around the world. Local brokers and international companies who have acquired a Ukrainian broking licence become members of the exchange, giving them direct access to auctions and trading, allowing them to represent their clients in buying and selling the commodities and contracts being offered on the exchange floor.
Smartlands is in the process of acquiring a Ukrainian brokerage licence which we expect to be issued shortly, at which point Smartlands will join the UICE as a member of the exchange.
Today the UICE at Contracts House is led by the Chairman of the Board, Anatoliy Guley, who has had an extremely distinguished career in the Ukrainian economy. In addition to the UICE, Mr. Guley is also Co-Chairman of the expert council of the National Bank of Ukraine (NBU), where he advises the NBU board and government ministers on national economic strategy as well as holding the role of Chairman of the Supervisory board of the Western Ukrainian National University.
Mr. Guley is also on the supervisory board of Business Incubator Group – Ukraine (BIG-U), with whom Smartlands has an ongoing joint venture to develop SMEs and prepare them for ICO on the Smartlands platform. For more background on BIG-U, the reader may be interested in our article published on 30th September, a link for which appears at the end of this article.
The operational side of the UICE is headed up by Chief Operating Officer (COO) Pavel Shylo, who can be seen below, standing in a photo of the signing of the partnership agreement between Smartlands and the UICE.
Volodymyr Vorbiov and Martin Birch, Smartlands, Pavel Shylo, standing, UICE
In an example of the synchronicity of it all, the author of this article was employed by an American-owned investment bank between 2008 and 2014 as Vice President and head of international equity sales. During that time, Mr. Shylo was a Vice President and Head of Trading at the same bank. So, although our partnership with the UICE is a new event, the Smartlands team in Kyiv has had the pleasure of working with the UICE’s key management in a number of areas over the past 13 years.
Today the UICE is in the process of concluding a multi-year project to introduce cryptocurrency trading and settlement to the exchange and, where applicable, to offer interested parties the opportunity to settle some commodity trades in cryptocurrencies where both parties are agreeable.
So, what’s in it for Smartlands?
Under the terms of the partnership agreement with the UICE, Smartlands will utilize the exchange and its distribution channels to promote ICOs on the Smartlands platform to a much wider audience. It is intended that investors will be able to access the Smartlands platform through the UICE and be able to participate in Smartlands ICOs in exchange for both fiat currency and cryptocurrency, forming a distribution channel through Ukraine’s premier commodity and financial exchange in addition to our existing network.
Smartlands has also developed a complete crypto infrastructure including blockchain and smart contracts, and the UICE is currently investigating which aspects of the Smartlands intellectual property can be utilized by the exchange to handle trading and settlement for the brave new world of crypto that the UICE is now entering.
For new investors participating in an ICO for the first time, the fact that access to these opportunities can be made through Ukraine’s oldest commodity and financial exchange will be a major positive. It is worth noting as well that through the UICE, Smartlands will have direct access, in a trading environment, to all of the brokers who are currently members of the exchange, the clients of these brokers will form a further distribution channel for Smartlands ICOs.
Although this agreement with the UICE is a significant coup for Smartlands, it should not be considered in isolation as a stand-alone development. It has long been a major factor of the Smartlands business plan to make its platform part of the economic infrastructure of the country as a key source of capital raising for asset owners and business owners across all classifications.
As I have mentioned in previous articles, Smartlands is creating a structure that will not only bring a great deal of prosperity to the Smartlands platform resulting in an ever-growing distribution pool for token holders but also to form a template that can be easily transferred to other locations and countries based upon proven results.
Our partnership with the UICE is yet another building block in the creation of this template and will help to lay the foundation of the stated goal of Smartlands, which is to tokenize the world.
Kyiv, November 2021
About the author, Martin serves as the Non-Executive Chairman of the Smartlands Group and is the Managing Partner of the Ukrainian investment bank, Empire State Capital.