The prospect of trading in cryptocurrencies combined with traditional financial means has contributed to the creation of special, digital security resources - security tokens (Security Token Offering). More and more goods are being tokenized, including even such highly luxury.
Security Token Offering STOs
STO they support the process tokenizacji various types of assets, both shares and Real estateand even works of art. Their application is tempting also because they provide opportunities to reduce costs and simpler methods of raising funds compared to traditional methods, while ensuring full compliance with the law. What's more, the Security Token Offering users have the opportunity to trade their shares 24/7 while maintaining full transparency of the entire process. And finally STOas in the case of the original offer ICO, they allow companies to raise funds without having to invest their own contribution.
The largest Security Token Offering markets
It is worth taking a look at the individual Security Token Offering markets, as although they share a number of common features, each of them has an individual approach to security tokens.
The USA is definitely the leader in the area of STO, especially in terms of the development of legal regulations. Security tokens provide American investors with a high level of protection, and moreover, regulations on this area are supervised US Securities and Exchange Commission (SEC). The solutions used facilitate projects Security Token Offering obtaining funds from accredited investors in accordance with the legal letter, while maintaining benefits such as reducing costs and improving the process of asset trading.
The SEC's move towards security tokens has definitely contributed to the tokenization of many projects in the US market - more and more companies are interested in this solution. The individual STO goals have already been achieved in the US, and many companies have been very successful in the field of digital solutions. What's more, security tokens are used in the US in many industries, and their use is becoming more and more common. What is characteristic of the American Security Token Offering market is also its rapid development, and thanks to favorable regulatory solutions, the United States is perceived by many experts as the focal point of the emerging security tokens market.
Although China announced prohibition of the use of STO, Hong Kong has found a way to circumvent it. Securities and Futures Commission Hong Kong (SFC) announced the so-called regulatory sandbox for stock exchanges and STOs, thus opening the Chinese market to the benefits of security tokens. The three best stock exchanges in the world: Huobi, Binance and OKExall three from China are currently testing different STO trading methods, and further major stock exchanges are applying for the license for regulatory sandbox activities.
China in terms of legal regulations is definitely not conducive to the development of security tokens, but paradoxically they have the world's largest trading exchanges of cryptocurrencies and digital currency projects. Nevertheless, investors are advised to be particularly careful about the Chinese market because of the rigorous approach to this area of local authorities.
The European Union
Although uniform security rules for security tokens common to all Member States still prevail in the EU, individual countries are already starting to set up their own regulations in this area. European Securities and Markets Authority (ESMA) guaranteed Security Token Offering projects a fairly wide scope in terms of financing in the Union, but ordered actions in accordance with the law. The leaders in the use of the Security Token Offering on the European scene have become Gibraltar and Malta, on which the exchange of STO started Chinese giants - OKEx and Binance. Favorable security conditions for security tokens are also offered by such states as Austria, Lithuania, Estonia and Cyprus.
Thailand turned out to be another Asian country, after China, in which the Security Token Offering market is promising for the development of the market. Security tokens have even become of interest Thai Securities and Exchange Commission, which analyzes the various options of the lawsticks regulating this area. It can not be denied that the Thai market is well aware of the potential of STO, as evidenced by the fact that the Thai cryptocurrency market Satang it intends to raise 10 millionth capital thanks to the Security Token Offering. The regulations in Thailand are not entirely clear, but everything indicates that they will be developed for the benefit of security tokens projects.
Singapore is a favorable country to all digital solutions, and therefore it should not be surprising that it will also be involved in STO projects. Currently, work is underway to launch the security tokens settlement platform iSTOXthe application of which plans to introduce Security Token Offering plans one of government funds.
It is also worth adding that the platform based in Singapore SPiCE VC has become the first holding fund to tokenize its profits, guaranteeing tokens holders a certain share of net profits. Security Tokens has generated a profit of almost USD million for the company that has been invested in technology companies. Although Singapore is a small country, it does not deviate very much from its potential in terms of STO from the USA and the European Union.
Another promising market is Switzerland, where the breakthrough in the Security Token Offering was a decision issued by Swiss Financial Market Authority (FINMA), authorizing companies from the fintech category registered in the territory of this state to hold deposits from raising funds for the amount of 100 million USD. Next year, Swiss SIX Digital Exchange announced the introduction of STO, while the platform Tokenstate announced that it carried out the first digital transaction based on the company's blockchain technology Ethereum using Swiss francs.
Switzerland seems to favor the development of the Security Token Offering - both in terms of legal regulations and technological solutions. The biggest obstacle may be legal barriers for investors from other countries, in particular from the USA.
Canadian Security Administration (CSA) approved a regulatory sandbox for startups from the category fintech, including security tokens projects. The first solution of this type used in Canada was the project Impact Coin implemented in 2017 year, and accepted in 2018 by Canadian Stock Exchange (CSE). Since then, there have been other promising projects on the Canadian market, such as Kabuni, Digimax or Galaxa. Thus, Canada, with regulatory facilities and numerous starups, seems to be another promising market for Security Token Offering.
Malaysia is also showing the recent high interest in the Security Token Offering area. According to a recent statement Securities Commission Malaysia (SC) and the Central Bank of Malaysia, work is currently underway on regulations aimed at adapting digital assets to standards set by securities-related regulations. These activities are aimed at promoting fair and transparent trade, while at the same time providing due protection for investors.
This position gave a green light to action in the area of security tokens. One example is United Overseas Bank Malaysiawhich he introduced UOB Mighty Secure, which is a form of STO that helps its clients operate their funds.
Not so long ago, everything indicated that Japan would become the main center of cryptographic activities. A series of cyber attacks carried out on the territory of that country in the 2018 year, however, brought losses amounting to nearly 540 million USD. As a result, Japanese Financial Services Agency (FSA) it was forced to tighten regulations related to the circulation of cryptocurrencies, imposing a forced registration on Japanese tokenists.
The Japanese consulting company came out against the hard regulations, helping companies pass through the registration process at the FSA. One of her first successes in this field was the introduction of her tokens by the company Asobi Coin, in accordance with all required regulations. At the moment, Japan, although it has a lot of potential, remains one of the most dangerous in terms of the Security Token Offering market.
In 2017 year British Financial Supervision Authority (FCA) issued a special statement on the ICO, ensuring that each offer will be considered individually. It was also recommended not to sell unstable, unstable products. STO is perceived in the category of financial product regulated by the British securities law. The use of STO is planned by such British companies as Wickwar & Co and DOVU. The UK Security Token Offer regulations can be considered beneficial, which is supported by the fact that many British companies have already successfully implemented this solution.
In summary, investors around the world are increasingly and more likely to turn to digital assets due to a number of related benefits. The main obstacle seemed to be quite rigorous legal regulations in this area. And it is the Security Token Offering that is the golden mean that allows us to draw on digital solutions while complying with the law. Each of the above-mentioned markets implements its own solutions in this area, aimed at effective but above all safe use of the security tokens potential.