Value Creation with Security Token Tsunami Expected Soon

Value Creation with Security Token Tsunami Expected Soon

October 31, 2018 Off By Steven Anderson

There is a lot of mention about Security Tokens.  It is not possible to develop a security token market without investor money, and there is a need for a lot of investor money.

Connor Cantwell, from Cosimo Ventures, stated that the market is going to venture a security token tsunami that will be based on different tokenized assets.

Leaseum Partners are involved in asset tokenization of real estate in the NYC area.  There are others who are tokenizing other asset types.  STOs being regulated securities are about tokenizing assets of institutional interest.

However, before any significant investor wave can set in some very basic problems in the technology needs a solution, and once they are set concerning regulation, a great deal of security tokens will flow in the security token market.

There is a requirement for custodians because no one will be willing to have their wallets hacked. The bulk of the money will be from other people, and there needs to be some advanced security to ensure appropriate custody of the tokens.

Governmental scrutiny is looking into all of such factors.  And there are many startups ready for the new wave of Security Token Offerings. STOs are already becoming a norm in the STO space.

The ICO model is not viable anymore.  And several ICO projects are delaying their campaigns.  Regulators are cracking down to securities that can be called unregistered securities.

Security tokens that are backed by metal and cash are already made available.  When real-world assets are tokenized as securities, they add to ownership and value.

And, several money managers are insisting on the safety and security of the centralized ledger with the ability to create a channel that will provide for liquidity which would otherwise be illiquid. Investors expect that the risks in security tokens should be manageable when compared to other securities.

Regulation of the security token is very complex and of course daunting.  However, once these challenges are solved there will be a positive twist.  It is important for security tokens to travel past the regulatory boards regardless of how complex they are to ensure protection for investors and also to establish the trust for their tokens.

David Prais, who was formerly linked to Cofound, opines that these tokens might not create the hype of crowdfunding.

However, security token issuance of any kind will require preparation.  Anyone who is going to issue tokens will have to except an arduous review.

The ability to real accredited and non-accredited investors is based on the kind of offerings they might issue and what SEC has to stay about them.

In the end, it is indispensable for Security Token Tsunami to be possible without regulatory reality.