Are Security Tokens What’s Next for Blockchain?
In 2008, Bitcoin changed the face of the global financial system and disrupted finance forever. “Electronic Peer-to-Peer Cash” was here to stay.
Later on, Bitcoin’s underlying technology, the blockchain, became the talk of Wall Street. People explored innumerable ways this technology could revolutionize financial technology.
From remittances to file transfers — and, yes, even securities — blockchain technology would replace the tedious back-office processes of old world systems created before the internet.
In 2014, the Ethereum Project conducted an online crowdsale to develop open-source technology that would make available to users “smart contracts” and eventually the “ERC20 token” standard. (We’ll get back to that)
2015 was “the year of the blockchain”. Multinational technology corporations IBM, Microsoft, Alphabet (Google), as well as major banks HSBC, JP Morgan Chase, Bank of America, and others had all explored and/or invested in blockchain.
Ethereum had its first release that year as well with “Olympic”. Ethereum had been dubbed a sort of “Bitcoin 2.0”, but there would quickly be growing pains to overcome.
In 2016, there was more blockchain exploration by the world’s largest corporations. R3, a global consortium of banks exploring blockchain technology, announced Corda, its new distributed ledger technology.
When The DAO (“Decentralized Autonomous Organization”) was hacked, $60 million in Ether were lost.
We can’t forget the Bitcoin halving event in 2016.
2017 was the year of the ICO. Self-described “Utility Tokens” were the hot topic as people sold billions of dollars worth of tokens most often launched using Ethereum’s ERC20 token standard.
By the end of 2017, nearly $4 billion had been raised in ICOs since 2013. The largest ICOs of 2017 included SALT Lending and Filecoin.
What’s next for blockchain?
At the start of 2018, the CFTC and SEC met to discuss Blockchain, Cryptocurrencies and ICOs, and regulation.
“I believe every ICO I’ve seen is a security,” said SEC Chairman Jay Clayton.
Enter, Security Tokens
Your “utility token” is probably actually a “security token.” But don’t panic!
Polymath is doing for securities tokens what Ethereum did for utility tokens.
As the interface between financial securities and the blockchain, Polymath simplifies the complex technical and legal challenges of a successful token launch.
Our blockchain-based system coordinates and incentivizes participants to collaborate in order to launch actual, regulated financial products on the blockchain.
Polymath’s ST20 security token protocol embeds regulatory requirements into the tradable tokens themselves, which are only available to verified and authorized participants.
Authorized investors must meet the criteria for each particular security offering in order to transact with that security token. Restrictions provide issuers assurance that their tokens will only be held by authorized investors.
Polymath is the decentralized platform that bridges the gap between financial securities and the blockchain. We are creating the standard for blockchain-based securities tokens.
Learn about security tokens today at Polymath.Network.