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⏰ Time Stamps ⏰
7:29 What Are Security Tokens?
9:32 Security Tokens: Democratizing Finance?
16:51 WTF Happned With STOs In 2019?
19:15 Regulation Holding Back STOs?
🔗 Helpful Links 🔗
► SEC Regulation D: https://www.sec.gov/fast-answers/answers-regdhtm.html
► SEC Regualtion Crowdfunding: https://www.sec.gov/smallbusiness/exemptofferings/regcrowdfunding
► SEC Regulation A+: https://www.sec.gov/smallbusiness/exemptofferings/rega
► Codefi HMLR Case Study: https://codefi.consensys.net/hmlr
► 1X STO Platform: https://www.1x.exchange/
► World Bank Issue Blockchain Bonds: https://www.worldbank.org/en/news/press-release/2019/08/16/world-bank-issues-second-tranche-of-blockchain-bond-via-bond-i
► Santander Bank Issues Blockchain Bonds: https://www.santander.com/en/press-room/press-releases/santander-launches-the-first-end-to-end-blockchain-bond%C2%A0
► Link REIT & Allinfra Partnership: https://www.prnewswire.com/news-releases/link-reit-and-allinfra-announce-an-agreement-to-collaborate-on-the-use-of-blockchain-technology-for-the-tokenization-of-assets-300922467.html
► CMC For STO’s: https://stomarket.com/
❓ What Are Security Tokens? ❓
In a nutshell, security tokens are simply a tokenized representation of an underlying security. Securities are pretty much everything you can possibly invest in where you would have an expectation of profits. This includes things like shares, bonds and real estate.
Unlike ICO’s, STO’s are meant to be compliant with anti-money laundering and securities laws. The cool thing about STO’s is that they do not require the same regulatory oversight as IPOs due to exemptions.
In US security law, you can be exempt from registering with the SEC under a few regulations like regulation D, regulation crowdfunding and regulation A+.
🗳️ Security Tokens: Democratizing Finance 🗳️
Security token technology enables us to create fractional assets. Let’s take real estate as an example. Right now, most people can only own an investment property if they buy the whole house. However, security token tech can be used to turn that idea upside-down.
So instead of having one person buying one house for $300K, we could have 1,000 people paying $300 each and sharing this house. The awesome thing with security token technology is that you can buy a fraction of almost anything; for example, art, fine wine and baseball cards. All this means is that investment assets that were previously out of reach for most people are now completely investable. The adoption of STO tech means that assets once reserved for the rich would be available to everyone.
💰 What Happened With STO’s In 2019? 💰
2019 appeared to be a complete deadzone for STOs, with little to no coverage on crypto YouTube. That’s a massive fall from grace from being touted as the next hottest thing in crypto.
However, after a bit of digging, there are some reasons to be optimistic over the future of STOs.
* Codifi explored the idea of real estate asset tokenization with Her Majesty’s Land Registry in the UK.
* The 1X platform launched for institutional and accredited investors.
* The World Bank issued 50 million AUD worth of blockchain bonds.
* Santandar issued $20 million in tokenized bonds and transacted them on the Ethereum blockchain.
* LINK REIT, the largest real estate investment trust in Asisa announced a collaboration to tokenize assets.
All that being said, STO’s did face significant regulatory challenges and the progress in the space seems pretty limited to institutions and accredited investors. That’s probably why STO’s fell off our the radar in 2019.
🔮 Is It Really Regulation That’s Holding Back STOs? 🔮
Thailand and Taiwan have some of the most advanced STO regulations in the world. However, both have failed to attract any meaningful blockchain-based security listings.
It seems to be more of a case of the ‘right’ regulation being passed rather than a complete lack of regulation.
In short, yes, those pesky regulators are most likely holding up progress in this exciting sub niche of crypto.
📜 Disclaimer 📜
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading Forex, cryptocurrencies and CFDs poses considerable risk of loss. The speaker does not guarantee any particular outcome.
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