O n 15th October 2018, NEM attended the World of Security Tokens event, hosted in conjunction with Nugget News and Huobi Australia. It was a great event with a large turn out of guests participating in lots of interesting discussion around Security Tokens.
NEM Expansion Director, Jason Lee, did a keynote on the State of Blockchain around the world, focussing on security tokens and the key benefits.
What is a security token?
“Security tokens confer the right of payment against an issuer, either on a corporate basis like dividends or on a contractual basis like repayment of principal/interest under the loan.” (AFMA) Security tokens are essentially digitized traditional securities. Companies are able to raise funds from investors through issuing a fully-regulated “digital share” of its equity, assets or part of its revenue.
Advantages of Security Tokens
- Cost-effective -Smart contracts eliminate intermediaries
- Fast — KYC and AML checks are fast because they are automated, which makes selling assets to accredited investors fast.
- Global — The tokens may be eligible for global trading depending on their set up, which means as long as you have a wallet you trade from anywhere in the world.
- 24/7 trading — Crypto trading outshines traditional trading because it is non-stop.
- Rapid adoption — once it’s realized that they can lead to more liquidity and less administration. SEC Compliance — don’t have to worry about breaking the law.
Disadvantages of Security Tokens
- Security tokens come with many regulations and limitation on who can invest in them and how they can be exchanged. Therefore they can’t be traded freely.
- And since they can’t be traded freely and are subject to many secondary trading restrictions, liquidity can be affected significantly.
Jason then joined a panel with the other speakers on the night as they answered questions from the audience.
The Speakers/ Panelists included:
- Alex Saunders- Nugget News
- Dr Prash- Caleb & Brown
- John Bassilios- Hall & Wilcox
- Rick Klink- Open Markets
- Jason Lee- NEM Foundation
Watch Jason’s keynote and the panel discussion below!
News worth mentioning about STOs around the world ( from Jason’s keynote) :
- St. Regis Aspen Resort in Colorado Raises $18 Million via STO on Indiegogo.
- In Australia we have the beautiful Keppel Island looking at Luxury Redevelopment Via STO with am ambitious $300 mil
- Nasdaq plans to develop a platform where companies can conduct sales of security tokens in a similar manner to the popular initial coin offering (ICO) crowdsale fundraising
- In Australia — we have Konkrete looking develop fractionalised ownership of property and Picnic, an insurance blockchain platform looking to develop an STO , Peloton Blockchain which is looking to develop an enterprise managed service to securitised your tokens.
- State of blockchain — innovation is top down in China. Ant Financial also worked with Fonterra in New Zealand and Blackmores in Australia. Last time it was China to copy, now we are copy from China — Austrade delegation. Crypto was banned because at the height of the craze, people were mortgaging their house to buy cryptocurrencies. Now instead of mortgaging their house, are they doing to do an STO or securitised their house instead? There need to be proper regulation and frameworks.
- Globally, 92% of ICOs have failed since 2016.
- Coinbase’s U.S. dollar volumes had also fallen 80 percent from the fourth quarter of 2017 to the third quarter of 2018.
- Blockchain in Manufacturing Market Will Be Worth $500 Million by 2025
- Big companies like Walmart, Maersk, FedEx, UPS, and British Airways use blockchain components in their internal supply chain management systems.
- The NEM blockchain as a plug and play blockchain can easily allow to develop tokens through our mosaic offering can address security tokens and make this work.
- The question now is “not whether you are ‘for’ or ‘against’ security token offerings — that’s like asking our ancestors if they were for or against fire,”
- Australia cannot afford to lose out on this
- Oxfam International recently reported that eight individuals held more assets than the poorest 3.6 billion combined.