DESICO: How to issue and trade Security Tokens in the EU
1. Which problem is DESICO trying to solve?
Problem #1: No infrastructure to issue tokenized securities
DESICO’s solution: DESICO will create a legally compliant, and therefore game-changing infrastructure to issue and trade tokenized securities (Security Tokens). DESICO’s infrastructure will consist of a security token offerings platform, a security token exchange, and a payment system.
Problem #2: It is hard for retail investors to acquire tokenized securities
DESICO’s solution: Our platform is designed to let retail investors easily acquire and hold on to their tokenized securities (Security Tokens) under the EU member state law. This is a ground-breaking development as the majority of current tokenized securities platforms in the market only work with accredited investors.
Problem #3: A lack of post-ICO liquidity
DESICO’s solution: DESICO will operate a tokenized securities exchange as a key part of its infrastructure. This exchange will provide immediate liquidity to any tokenized securities issued by any business listed on the DESICO platform. The exchange will be subject to regulatory supervision.
2. What is the biggest challenge tokenizing securities and trading them?
The single biggest challenge that withholds widespread adoption of tokenized securities is the lack of legal regulations in most parts of the world that allow to issue and trade these securities. Also, as long as tokenized securities are available only to accredited investors and not retail investors, prospects of its adoption is limited.
We believe that we solved these issues and we are conducting our own security token offering starting on November 7th, 2018. DESICO STO will be open for both institutional and retail investors.
3. Where do you see the biggest advantages and risks of Security Tokens?
The biggest advantage of Security Tokens is the ease to issue and trade them. This gives them increased liquidity compared, for example, to traditional shares. It is a true product of digital age — faster, adaptable and more user friendly. The biggest risks to Security Tokens comes from lack of legal regulation around the globe. Fortunately, DESICO is operating on legal basis of the EU member state that allows issuance and trading of Security Tokens. This makes DESICO a pioneer of tokenized securities.
4. For which kind of security/asset class tokenization brings the most benefits, for which the least?
Almost any asset class can be tokenized. That is the beauty of tokenized securities. When we say tokenized securities, nine out of ten would imagine tokenized equity shares and it is all natural that shares would be the first to be tokenized. DESICO will launch a platform for companies to do that in 2019. However, possibilities are limitless and companies will also be able to tokenize bonds, derivatives and other types of securities.
5. When will your platform launch and what kind of Security Tokens will I be able to trade on it?
DESICO will launch it’s platform to issue and trade Security Tokens for retail and institutional investors in 2019. Our plan is to include all major securities classes into our platform. And to show the full potential of DESICO and security tokens, we are conducting our own STO starting on November 7th.
6. Who is eligible to buy and sell Security Tokens on DESICO?
DESICO will allow retail and institutional investors to buy and sell Security Tokens via our platform. The blockchain boom of 2017 was primarily driven by retail investors and we strongly believe that retail investors should have the opportunity to acquire tokenized securities together with institutional investors.
7. Will I be able to sell Security Tokens I bought via DESICO also on other exchanges?
Yes, Security Tokens acquired via DESICO platform or secondary market will be tradable on other fully legally compliant and regulated securities exchanges.
8. What would you recommend to projects considering doing an STO?
Choose the right partners. As STOs are becoming the next megatrend in crypto, the importance of choosing the right partners in this endeavor becomes increasingly important. These include legal, marketing, PR and other partners. With DESICO, companies will be able to choose from a wide list of verified third party service providers with a proven track record.
9. What was the biggest learning you made during the last year within Crypto?
Probably the most important revelation is the fact that retail investors are the biggest driving force behind blockchain economy. It was main street investors that were responsible for boom of late 2017. When retail investors lost confidence in blockchain, bear market creeped in. Therefore, it is crucial that STOs should not be limited only to accredited or institutional investors, but first and foremost — to retail investors. Blockchain is about democratization and retail-accessible STOs is exactly this.
10. Where do you see the Security Token Ecosystem in 5 years?
Tokenized securities are the game-changer that in next 5 years will make asset ownership more accessible to retail investors. The traditional VCs are not going to go away, but tokenized securities will become a primary way to raise capital for most promising startups.
Thanks for the interview.
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Note: This interview was conducted on 17.10.2018