It’s been more than 10 years since blockchain was introduced in Satoshi’s famed white paper. Since then, it’s expanded far beyond cryptocurrencies—with IBM, Oracle, Amazon, and other multibillion-dollar companies trying to capitalize on the disruptive technology. From the internet-of-things (IoT) convergence to startups for the unbanked… find out what major blockchain trends will define the current year.
While there’s a growing body of work documenting this emerging industry, there’s still a fundamental asymmetry of information in the security token space… and public knowledge is still quite limited. In an effort to inform the public and industry partners, global consulting firm PwC has released a report—with the help of Swiss Crypto Valley Association—which analyzes the state of STOs and ICOs.
Polymath and BMI Coinstreet Digital ally with STO Global-X to create end-to-end technology solutions for STOs
The end-to-end comprehensive platform for tokenization will arrange real world assets into several fractional ownerships using blockchain technology. This will give investors a digital marketplace for investment that is secure, transparent and inclusive. It’s strictly P2P—no middleman is involved, and the market is always up and running as it operates 24/7.
People often confuse the benefits of crowdfunding and other existing market dynamics with those of security tokens. Here’s some clarity around the benefits of security tokens issued by private companies relative to the current market for private securities—plus some misconceptions surrounding security tokens.
Fincross International, a digital investment bank startup, sees an immense opportunity in security tokens, according to the company's deputy chief executive and chief strategy officer. The big difference between security tokens and cryptocurrencies is the former is issued through a centralized network in a regulated market, while the latter is unregulated… And security tokens will be much bigger—and will offer more stable returns—than cryptocurrencies.
Token offerings have democratized startup funding, placing the sector firmly in the hands of the people. For that alone, blockchain technology has already proved itself a great leveler of the field and a means of lowering barriers. But there’s a divide at the heart of the market, and that schism lies between utility and security token models.
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Stablecoins are a hot item in the blockchain world. J-Coin Pay recently announced its official launch date in Japan, which will support its own stablecoin for payments. And J.P. Morgan announced it would be releasing its own stablecoin to speed up payments across borders, especially corporate debts.
The token sale model receiving the most hype at the moment is the STO, and a quick Google search of the term will show many proclaiming 2019 to be “the year of the STO.” The main benefit of using an STO as opposed to any other type of token offering is that it operates in a space with clear regulatory frameworks that guide issuers and investors alike.
In order to sell something to the masses, it must be standardized so people will trust it. In that sense, compliance and regulation are good things. PricewaterhouseCoopers expects to see institutionalization across the entire crypto spectrum. As more investors are entering the space, lawyers are busy with crypto and blockchain-related requests and governments are working to regulate it all.
Security tokens can accelerate the democratization of venture capital. Blockchain technology and smart contracts introduced an efficient means to raise capital without the use of intermediaries. Security tokens allow companies to raise capital without having to turn to investment banks and stock exchanges—as we’ve seen with businesses like Securitize, Polymath and Harbor, along with completely “tokenized” funds such as Spice VC.
Crowdfunding has been recognized as one of the most typical methods of fundraising for technological products, assisting millions of innovators in bringing their ideas into the market. Given the exponential growth of cryptocurrencies within the last few years, crowdfunding has attained new milestones and an increasingly promising prospect.
Hype has been building for the past few months for what many believe could be crypto’s next ICO-style craze: STOs.. Replacing the unregulated frenzy of ICOs with a new wave of regulatory-compliant tokens blending elements from cryptocurrency and traditional stocks, many are predicting STOs will be big news in the very near future.
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A prominent crypto economist explains how growing up in 1990s Russia shaped her belief that cryptocurrencies could one day become a multitrillion-dollar asset class. Anya Nova, with Perth-based blockchain project Power Ledger, says she experienced extreme hyperinflation during her childhood. That’s when she realized money is “a resource that the government controls—and occasionally mismanages.”
The security token market will dwarf the cryptocurrency market. They can represent fractional ownership of illiquid assets, such real estate or art, and so are more stable and easier to value for investors than cryptocurrencies. Boards of listed companies are already discussing the possibility of issuing security tokens.
Beyond business use cases, retail and institutional investors are acknowledging and taking advantage of the power of blockchain technology to bring unprecedented efficiencies to traditional financial markets. The emerging security token industry, a hot topic in the crypto sphere, is lauded for its ability to bring greater liquidity to financial markets.
The cryptocurrency world currently is in limbo regarding its market valuation, identity, and regulatory stance. The crypto space is still highly speculative regarding coin/token/project values, and there may be some confusion leading to overly bullish speculation. This begs the question: Are utility tokens (most current cryptocurrencies) overvalued?
As well as offering the potential for legally compliant ICOs, advocates argue that STOs allow companies to put existing securities such as stocks and bonds on a cryptographic blockchain, so people can trade securities with no need for a middleman. In theory, any form of value could be “tokenized”—stock certificates, diamonds, even art collections.
Experts are already predicting that the STOs will be a multitrillion-dollar market in the next few years. And for once, regulatory authorities and the crypto community are seeing eye-to-eye, as STOs are being looked at favourably both by regulators and blockchain ventures. Here’s what makes STOs the new darling of the crypto space...
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