Security Token Future Event Recap: The STO Advantage
This article shares highlights from LeadBest’s attendance to Security Token Future (https://futuresto.com), held recently in Hong Kong. The event was joined by Huobi, Polymath, DL Capitals, and ICORating, as well as worldwide STO experts, investors and government representatives.
In his opening remarks, Cyberport CEO Peter YAN King-shun talked about the various new financial opportunities presented by STOs and his outlook on the market — that STOs may surpass US$20 trillion in value by 2020.
Security token offerings are, as they’re known in the industry in their simplest terms, regulated asset tokenization. In other words, they enable the circulation of tangible and intangible assets in the form of blockchain tokens through legally recognized issuing and transacting parties.
There are four main types of entities in the security tokens industry landscape: the project party, the issuance solutions provider, the exchange platform, and the peripheral services provider.
In the traditional financial market, legal transactions are made through centralized exchanges. But for transactions to be legally compliant in the decentralized blockchain world, they need to be accompanied by the coding of legally compliant smart contracts. To this end, there were many companies offering their solutions at the event, such as Polymath and its security token protocol for complying with various regulatory requirements.
While regulations may lead to higher costs for the issuers and certain restrictions for the investors, tokenizing assets with STOs can still offer unparalleled advantages, including:
1. Lower investment barriers
2. Greater fluidity of assets
3. Lower fees
4. Cross-region transactions
5. Accessible financing for SMEs
On the question of creating STO-specific laws, the event’s speakers shared the same view that the technology outpaced governments, and that the industry moved faster than regulators could keep up. During a panel on the legislation of different laws for security tokens, Charles Mok, a Legislative Counsillor representing Hong Kong’s IT sector, remarked that legislative efforts should not run contrary to the premise of helping to protect investors against fraudulent activities.
STOs have the potential to revolutionize the world’s assets, which include US$7 trillion in equity, US$100 trillion in bonds and US$230 trillion in real estate. Complying with regulations to seize opportunities in those markets has become a top priority for all token projects today.
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