Top 6 countries to launch your own STO!
By Scott Macy on The Capital
Security token offerings, or STOs as they are commonly abbreviated, are seen as the finest point of confluence between new technology like blockchain, the utopia of global investments, and the values of protection of investors interest offered by traditional securities. It cannot be denied that it was the initial coin offerings or ICOs that heralded the possibility of the crypto space being a lucrative avenue for seeking investments. However, it was marred by a series of scams that tarnished the image not only for ICOs but for the crypto industry at large. It became so intense that 80% of the ICOs in 2017 turned out to be scams.
STOs have successfully salvaged the blockchain technology and crypto tokens from the depths of embarrassment that ICOs pushed them into. The presence of the word ‘security’ indicates that it has to pass the Howey Test essentially, and it comes under the regulatory purview of bodies like the Securities & Exchange Commission (SEC). Each jurisdiction might have similar regulatory bodies, but in all cases, every STO has to comply with the regulatory requirements.
No new revolutionary process has had a smooth ride. It has met with its share of criticism and resistance before it becomes a global standard, and the STO is not an exception. While there have been countries that have been skeptical towards adopting any crypto-based investment procedures, a few countries have been quite welcoming and adaptive. Let us look at those countries that have been futuristic in their approach.
Malta
It might not be an exaggeration to say that this small speck of land between Italy and Libya in the Mediterranean has been spearheading the crypto revolution, or to be specific, the official crypto revolution all across the globe. The government officials, and especially the Prime Minister’s office has been open in acknowledging the fact that blockchain technology is changing industries across the globe. They have explicitly expressed their interest in being the harbingers for the mainstream adoption of blockchain and crypto in everyday financial transactions. The Malta Stock Exchange (MSX) has partnered with the popular crypto exchange Binance to create a new security token platform for the country.
Switzerland
Switzerland has always been synonymous with being a safe financial haven. Switzerland was one of the first countries to adopt crypto regulations, and it had maintained its stance ever since 2014 when regulators released a report that talks about the significance of cryptocurrency. Switzerland did acknowledge the capabilities of cryptocurrency being an effective replacement for traditional money but did not go the distance of labeling it a legal tender because there are no other countries that accept the credibility of crypto coins.
To issue an STO, the issuing company needs to submit the project to the Swiss Financial Market Supervisory Authority (FINMA). This regulatory body, the equivalent of the SEC, reviews the proposal, and all the aspects of it to confirm the designation of the offering. The token labels should include payment, utility, asset, and hybrid tokens.
Canada
When it comes to North America, Canada has been ahead of the United States been leading the crypto revolution. The Canadian Securities Exchange (CSE) has made an announcement in February that it plans to launch a new security token platform based on the Ethereum blockchain — it should not be forgotten that Canada is the birthplace of Ethereum. Toronto has been the epicenter of all things related to blockchain and crypto in Canada. British Columbia has been catching up with Toronto, as Vancouver emerges to be an alternate location for blockchain companies.
Dubai
Dubai has never seen an economic slide back ever since it started to steadily progress as a tourist epicenter in the early 1990s. Dubai issued a state-backed cryptocurrency in October 2017, making it one of the first countries to do so. The Dubai Multi Commodities Centre — the DMCC — has started to facilitate a market in cryptocurrency, and is a member of the Global Blockchain Council. In fact, Dubai considers blockchain and crypto to be so futuristic that the entire crypto makeover was initiated as a part of the smart city initiative.
Israel
Israel has been a silent killer… We are only talking about blockchain start-ups! Israel is a leader in research and development, only 2nd to South Korea in terms of innovation. As a welcome move, Israel cut crypto taxes by 50% in October 2019, making the entire economic ecosystem congenial for a crypto revolution. Even before STOs became mainstream, Israel tried to regulate the ICOs in the country, showcasing the importance that it held for having everything regulated.
Lithuania
Lithuania is probably the least expected country on this list. It has surpassed all expectations by becoming the capital of security tokens in the European Union. The Finance minister of the country has introduced wholesome security token regulations that cover all the aspects not only including issuance and compliance but also taxation and accounting.
Although Lithuania might not have a perfect Howie Test in place, the Lithuanian officials perform a thorough inspection of the STO project every time they are sent one. Only upon the approval from these officials does the STO receive a go-ahead.
Despite being flanked by archaic economies like Latvia and Russia, Lithuania has managed to become a perfect testbed for cryptocurrency not only for the region but for the entire European Union. The EU looks to be the next target for Lithuania when it comes to popularising and making STOs official.
Conclusion
Technology might not be accepted in its most nascent form, but as and when it evolves to become more systematic and organized in its manifestations, it is bound to find wider acceptance. STOs fall into this category, and the countries mentioned above have been quite receptive to this paradigm shift.
It will not be long before even third world countries start to embrace blockchain and crypto. If you would like to be ahead in your game, it is the right time for you to invest in your own STO. Should you have entrepreneurial aspirations to launch your own STO, you can get in touch with some of the most reputed blockchain development companies. They will take care to customize and get your STO primed completely and make it ready for a successful and profitable launch!
