There are now many opportunities to capitalize on the potential of various kinds of tokens built on the blockchain. The utility token has seen significant growth and improvements over the past year and as blockchain embeds further into the financial sector, it’s natural that companies and investors seek ways to leverage that in a way which will benefit them for years to come. That’s where tokenized securities come in, appealing to both the everyday investor and crypto whales.
Tokenized securities, also called security tokens and are financial securities which comply with SEC regulations. With security tokens come all sorts of advantages such as dividends, profit shares, equity, and voting rights. Such rights are written into smart contracts, which then are executed through the blockchain, just as the tokens are traded using this technology.
There are a number of reasons why a company chooses to tokenize. Among them are the ability to break larger assets down into smaller quantities and that these are then more liquid. But more importantly, tokens can be traded and sold internationally without having to be converted into the government-issued fiat currency. Not only that, but this results in more equitable pricing, which is appealing to investors.
There are a growing assortment of platforms and exchanges which issue security tokens which can then be traded or serve as long term investments. Some of these have relatively simple services which are easy for beginners to navigate and others that are better suited to people who are experienced with the intricacies of blockchain technology.
Polymath — One of the most well-known issuance platforms. Can be used for the creation and issuance of securities tokens. Allows issuers and investors to interact, has regulatory requirements embedded into the tokens and only allows verified users to participate in trading.
Securitize — A cloud service solution for tokenizing securities, as well as enabling the tokenization of funds, companies and other entities. It’s regulatory compliant and offers a number of services which include customizing smart contracts for users, and determining if issues and their team are prepared for tokens to be issued.
OpenFinance Network — An open source platform which specializes in secondary markets for alternative assets. They have developed a standard of compliance via which security tokens can be exchanged and then issued on the blockchain.
New tokens, platforms and exchanges are being established on a regular basis, and as this segment of the financial industry continues to grow, it is likely that more established companies will either seek to acquire them or develop their own — making tokenized securities an exciting and potentially lucrative area of investment.
