The new wave 🌊 (Security Tokens)
The Security Token Industry is developing rapidly.
What’s the momentum behind Security Tokens?
Reducing regulatory risk.
Using regulatory offering exemptions (e.g. Reg D or Reg S exemptions)
Generating higher ROI.
Due to cross border trading and potential higher liquidity premiums
What’s the value proposition of Security Tokens?
The security token offering is developing into an evolution of ICOs. “Security Token Offerings” or STOs provide a new source of needed capital. $5.6 billion was raised world wide by ICOs in 2017, the size of the 2017 U.S. IPO market was roughly $40 billion.
Securitize existing assets
The tokenization of global assets is a huge opportunity. Global equity assets are valued at about $70 trillion, debt around $100 trillion, and real estate about $230 Trillion (about $180 Trillion in residential, $32 Trillion in Commercial, etc.)
What is developed to support the STO?
- Companies helping in the creation of tokens.
- Retainer based advisory firms.
- Registered broker dealers charging a success fee.
- “Security token investment bankers”.
- Security Token ATSs and and Security Token Exchanges allowing both institutional and individual investors to trade security tokens.
This year we will see more and more U.S. token offerings being compliant with SEC Regulations. Security token trading organizations will emerge to enable the trading of security tokens. The industry is starting to take shape in 2018. More components will need to be built, but 2018 will prove to be a major year for the industries development.
Disclaimer: This article is meant for general education purposes only.