Blockchain security tokens broaden investor pool and support liquidity
What is blockchain technology and Security Token Offerings?
Blockchain technology offers a secure way to authenticate transactions and prove ownership over digital assets. Instead of relying on a single registry, blockchain relies on a network of computers to authenticate transactions and attest ownership rights. This ensures greater security of data without the need to rely on a single source. Blockchain technology has been used to issue and facilitate trade in digital tokens. An emerging trend is the issuance of STOs (Security Token Offerings), which are financial notes that are backed by securities and physical assets. STOs allow investors to participate in real physical assets and companies through ownership, earning streams, dividends or interest payments. In conventional terms, STOs can be thought of as digitized forms of equity, bonds or derivatives. Since they represent securities, they are usually subject to comparable regulatory oversight as other types of security issuances. This offers greater protection to investors and promises to avoid the…
