Security Token London Meetup Recap
In June, Security Token Academy hosted the inaugural Security Token London meetup, working in partnership with Fincross International.
The networking event brought together industry executives, financial services professionals and those interested in leveraging security tokens for their businesses for an evening of insightful discussion, drinks and bites.
A top-notch lineup of panelists joined us to discuss the state of the security token industry. Those panelists included:
- Daniel Coheur, co-founder and CSO of Tokeny
- Henry James, deputy CEO of Fincross International
- Graham Rodford, CEO of Archax
- Breige Tinnelly, Head of Europe for Securitize
Here are some of the event’s insights shared by our esteemed panelists:
The Benefits of Security Tokens
Henry James, deputy CEO of Fincross International, summarized the point of security tokens as bringing liquidity to illiquid assets. This was a major point of discussion throughout the panel discussion, but the audience wasn’t so sure.
As audience members questioned the potential for increased liquidity during the Q&A session, Tokeny co-founder and CEO Daniel Coheur jumped in and noted other benefits outside the hope for liquidity, such as reduced costs for custody and improved technology for issuers.
But, other panelists reinforced the liquidity benefits, adding that efficiency is the key to leveraging tokenization to improve liquidity. In addition, it was noted that creating a VC fund with some liquidity (such as SpiceVC), rather than being locked for seven to 10 years, was not possible before security tokens.
The Industry’s Technology Advancements
When it comes to why companies are investing in security token infrastructure, Archax CEO Graham Rodford shared, “Because the technology is going to completely change financial services because the whole infrastructure can be improved.”
“In the long-run, it just makes sense for everything to be on chain,” noted Rodford, while highlighting the ability to code “if this, then that” into a security using smart contracts.
James of Fincross added, “The token economy is one that becomes accessible to anyone with an internet connection.”
The Regulatory Environment
When it comes to the application of regulations to security tokens, Tokeny’s Coheur declared, “Securities law is the law. You need a compliance platform to bridge the gap between the law and technology.”
Securitize Head of Europe, Briege Tinnelly, added, “The (United States) SEC has been quite clear in terms of what constitutes a security. But there are lots of things still to clarify.”
Added James of Fincross: “The regulatory compliance sounds like a nightmare, but the point of blockchain is to simplify the process.”
Benefitting and Reaching Investors
Tinnelly described three key components of digital securities on the investor side:
(1) Access to a wider range of investments (like AspenCoin);
(2) Diversification of the pool of assets;
(3) Ability to sell and have liquidity.
Adding to the range of investments, James noted that the applications for security tokens could range from tokenizing real estate in a vanilla format to tokenizing debt or soft assets.
Coheur added that what is lacking in terms of reaching retail investors is the platform to create visibility for those assets.
Advancing The Security Token Industry
All of the panelists agreed that quality projects are required to help move the industry ahead. Coheur also added that we need to improve investor education in addition to bringing good projects to market.
James of Fincross noted that, at the end of the day, the leaders in this space will be technology companies because of the need for distribution. Ultimately, however, every global player in the financial industry will look into security token technology. And, financial institutions getting involved will be what ultimately helps the industry realize its disruptive potential.
Many thanks to the sponsors of the event:
Fincross International, an investment banking, securities and investment management firm specializing in traditional and digital assets, is sponsoring the event.
Merrill Lynch’s Private Banking & Investment Group
Clifford Chance, a law firm serving emerging fintech companies and leading financial institutions.
Fincross International, Merrill Lynch PBIG and Clifford Chance are Gold Corporate Members of the Security Token Academy. Learn more here.
