The Security Token Ecosystem Study Summarized #5

BlockState
Nov 8 · 3 min read

The final episode of our daily series to summarize the Digital Securities Study. This time we’ll talk about one of the smaller categories of the ecosystem: The banks.

Hesitation

We included banks in our study when they executed any type of action that included security token activity. This means that a bank doesn’t necessarily has to offer token-related services in order to meet our criteria. We decided that this classification was needed as our research showed that some banks for example are limiting their activities to one-time transfers of digital securities. Activities like those do count as fairly important and are definitely related to digital securities, yet aren’t connected to any kind of offered service.

Nevertheless some banks do offer financial services as well. Especially tokenisation and the associated issuance are interesting to banks. Furthermore, custody and settlement are sometimes being offered as well.

Number of banks offering digital asset services

Geographical perspective

Contrary to the other categories the USA don’t lead this one. Switzerland, China and Germany share the first spot with 3 banks each. China’s involvement in this category is especially interesting as the usually tech-friendly country wasn’t represented often in the other sections of our study. The relatively sharp rise in activity can be explained with the type of banks that work with Security Token:

  • The Agricultural Bank of China,
  • the Bank of Communications
  • and the Zheshang Bank

are all state owned institutions and reflect China’s ambitions to apply blockchain solutions in many areas of their national economy.

Types of banks

Various different types of banks worked with Security Token before. Commercial banks, state owned banks, investment banks and corporate banks quite evenly share the market with each other, as seen in the graph below.

State owned and commercial banks tend to prefer tokenisation, especially of debt instruments which are frequently exchanged between two banks in the form of a loan. Corporate banks make up for most of the custody and settlement offers while investments banks are trying everything out.

Private infrastructure providers

Conclusion

The activities of different banks to further advance their operations with the actual use of digital securities make the traditional financial institutes seem hesitant. Nevertheless the technology has gained the attention of even the highest ranking corporate and state banks, indicating that its adoption might only be a matter of time.

Also, the even distribution of types of banks working with the tech itself could open up the market a lot as different approaches should lead to a wide spread range of offered services.

BlockState

Written by

BlockState is a Swiss security token platform for non-bankable assets such as SME equity and debt or real estate.

BlockState Times

BlockState is a Swiss security token platform for non-bankable assets such as SME equity and debt or real estate. We digitise assets to directly connect issuers and investors.

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