Jon Walsh is associate partner of Blockchain Rookies, a Blockchain education and strategy consultancy firm. He shares his predictions on the future of such things as SEC prosecutions, STOs, and blockchain protocol.
With interest for ICOs cooling down, a new type of blockchain-powered funding mechanism is gaining a lot of buzz—the STO. STOs are still a very new model, and the infrastructure for conducting STOs and potentially trading the tokens on a secondary market is being developed by multiple companies.
Just as investors in real estate investment trusts can buy shares that represent an ownership stake in a piece of large trophy assets, a digital security token offering functions much the same way. Known as "tokenization," companies are trying to pioneer a system for trading ownership shares in real estate using blockchain technology and REITs as the vehicle.
The digital wrapper provided by tokenization offers a wealth of benefits. It’s already experienced implementation in the traditional financial securities sector, to include luxury property, REITs, equity, investment funds, and fine art ownership. Such an atmosphere has created a significant buzz around security tokens. Many perceive they will go on to seriously disrupt the capital markets industry in the near-future.
Gates highlights how the world’s poorest people do have assets: their intellect, labor, and their savings. However, the lack of financial infrastructure in the developing world exploits these assets, as opposed to allowing these individuals to see their full benefits. But a digital financial system would bring a much needed change.
Jay Clayton officially took office in May 2017. When he was sworn in, he wasn’t asked a single question related to blockchain or cryptocurrencies. Now, a common debate concerning regulations centers upon security tokens. Some believe that tokenized securities need new laws—but Clayton has consistently implied that security tokens are subject to the existing securities laws as established by his commission.
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Despite current setbacks in the cryptocurrency market, the security token movement remains a bastion of optimism for blockchain and finance industry actors. With an estimated addressable market of $500 trillion, security tokens are an attractive prospect for many. But to unlock the full potential of this tremendous new asset class, industry collaboration—on a global scale—will be necessary
A “stable coin” is a cryptocurrency that is pegged to another stable asset, like gold or the U.S. dollar, but is not tied to a central bank. This allows for using cryptocurrency to pay for everyday things. As the cryptocurrency markets continue to sink, stable coins are mushrooming like there's no tomorrow. It will probably only be a matter of time before the SEC turns its attention to this class of digital assets.
ICOs were all the rage in 2017 and early 2018, raising billions upon billions of dollars. But a disproportionate number of these projects failed to deliver. With ICOs falling to the wayside amid legal concerns, a new token offering model is on the horizon: security token offerings. Learn the crucial difference between these two models.
According to Daniel Masters, the chairman of the U.K-based CoinShares, STOs are going to be a big hit in a crypto industry that’s ready for its next wave after Bitcoin and Ethereum. STOs offer the added advantage of attracting greater liquidity as well as helping projects not worry about regulatory clampdowns.
STOs have the potential to overcome several drawbacks of ICOs, including regulatory uncertainty. Because security tokens represent a claim to an asset, such as equity, investors have rights and reassurance. This contrasts with utility tokens, which are sold on the understanding that they may be worth nothing—and that holders have zero claim to any sort of assets.
Charlie Xu is a former strategic managing director of Fenbushi Capital, China’s most active blockchain VC fund. He now acts as CEO and founder of Hashgard, a one-stop shop for the management of digital assets. Xu concluded that 2019 to be a “watershed year” for security tokens and holds that STO activity will evolve into a trillion-dollar industry by 2023.
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Security tokens are expected to account for 80% (or $4 trillion) of the total global market cap (GMP) of cryptocurrency by 2025, with trading volume of these tokens exceeding $40 trillion for the same period. Tokenized securities will be recognized as legal securities under federal law, and therefore ownership protection will exist.
Harbor CEO Josh Stein discusses the overall functionality of Harbor’s R-Token and the common benefits security tokens bring to traditional finance. Through added liquidity and increased investor access, tokenized securities can bring legitimate benefits to many areas of traditional finance.
The security token offering – or STO, as it’s being called – addresses the uncertainties of ICOs while embracing the fact that tokens are indeed securities. Like ICOs, STOs provide an innovative approach to capital funding, democratizing access to both capital for startups and investment, while providing much-needed transparency...
Cryptoassets are already coming of age. With the arrival of the security token offering (STO), the crypto space is beginning to reach an uncharted level of legitimacy in the financial community. We are about to witness perhaps even more disruption in markets and society than we’ve been promised. The STO is the safe, secure, and sensible answer to the ICO.
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