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.

SportsLedger has officially announced plans to launch an STO. In early 2018, the company had announced plans for an ICO, which were soon halted due to regulatory concerns. Other companies are also likely to make the transition to STOs to ensure compliant offerings. Purchasers of the SportsLedger security token will be entitled to future dividends and, in the event of the company being sold or going public, a conversion into common equity will be possible.

Digital assets have many advantages when integrated with blockchain technology. Benefits include overall efficiency, security, and transparency. But institutional investors have displayed hesitation when it comes to entering the cryptocurrency realm. A major reason has been unclear regulatory guidance.

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.