How Security Token Offerings (STO) will revolutionise the digital asset class
“Blockchain startup 20|30 has raised £3 million ($3.93 million) in a sale of tokenized shares in a test environment on a London Stock Exchange Group (LSEG)-operated platform.”
With tokenised raises becoming more frequent, the way in which capital is deployed will be changed too. Frictionless, borderless and instant payments are already here. The next step: tokenised equity.
What is an STO?
Security — financial instrument that has monetary value and can be traded
Token — A digital asset class.
A Security Token Offering is when a company sells a security in the form of a digital asset.
How is an STO carried out?
Currently few countries allow STOs to be carried out. In Malta, regulatory frameworks are in place, for both STOs and for exchanges. Countries such as the UK (see the start of the article) are also becoming in favour of it.
Crowdfunding or STOs? Key Differences.
Crowdfunding through platforms such as kickstarter are usually based around objectives and are not regulated or tied to anything. As you pre-order on kickstarter for a discount, you find similarities between that and ICOs in the “pre-sale” format.
STOs are different. They are regulated and tied to assets. They are digital securities. A new token form. The digitisation of assets can lead to the next step of exchanges, where minerals such as copper (which can only be traded for under 30 hours a week) to full 24 hour exchanges. It is being used in Moldova for co-operative banks as well as to fractionalise and liquidate debt in South America.
STOs seek to adopt an important mechanic from crowdfunding(ICOs): the ease of access to entry as well as giving members access to VC level returns. Previously, these “abnormal” returns were only available to accredited investors. The current requirement for an accredited investor in the United States should have a net worth of $1 million and an annual income of $200,000. To see the full requirements click here.
Transparency and Traceability: Introducing Geostandards
Blockchain can be used in a variety of ways. We have seen it be used for stores of value like Bitcoin, to have applications built into them and to distribute “money” in the form of cryptocurrency like EOS and Ethereum and even HSBC used it to process over $250 billion worth of transactions.
Geoblocks is using it in a multitude of ways. It is using it to tie the mineral assets to the coin. It is also using it to provide transparency and to promote ecological ethics with all of its partners to create a global Geostandards.
The private sale is now live, and if you have any questions contact the Geoblocks team on telegram.
