It takes a while to turn a ship. However, there is great financial incentive for investors and companies to adopt a new system.
Presently, the financial industry is bloated with intermediaries that increase costs, slow down the process, and provide risk to the entire system.
It now takes a number of days for securities, when traded, to settle.
In an era where communication around the globe is instantaneous, this is preposterous.
Nevertheless, there is a new option on the horizon. The tokenization of securities remains a viable alternative due to the numerous benefits. Unfortunately, the idea of shifting the financial markets overnight is amiss.
Wall Street, like most dominating entities is locked in. Major firms, especially in the banking sector, are in positions of power, something they are not likely to give up easily. The same holds true for exchanges and other financial institutions who make a great deal of money by taking a sliver of each transaction.
This, coupled with the fees they charge for services that are required since they established the system, makes for a tidy profit.
Speed, transparency, and efficiency are all factors that are provided through tokenization. It is something that Wall Street does not want since it would prohibit a great deal of the behavior that presently exists. After all, those who are accustomed to operating in dark corners do not want light shed upon their activities.
Many are looking at security tokens as a situation of when will the existing system embrace them. Unfortunately, that will likely not happen since disruption rarely happens by the incumbents. A more realistic scenario is one where those outside the system start to remake the structuring of securities, creating a viable alternative for companies to consider.
There is much discussion these days about decentralization in many fields. We are witnessing a segment of the overall population realizing how destructive and inefficient centralization truly is. In a technological era, the need for innovation is great and it rarely comes from the largest behemoths in any industry.
Security tokens have the opportunity to disrupt hundreds of trillions of dollars worth of assets. When we factor in equities, real estate, and partnerships, we see how enormous this industry can be.
What is interesting is the fact that people are acquiring more cryptocurrency each day. As people find more of the holdings in cryptocurrency, and the industry expands to reach more people, security tokens will hold a lot more appeal. The idea of investing in different asset classes using cryptocurrency that is earned will hold great appeal to people.
Presently, the money in cryptocurrency, relatively speaking, amounts to very little. An industry that is worth only a few hundred billion, and most of that in Bitcoin, does not compare to what takes place on Wall Street and within the existing financial markets. Nevertheless, it is a starting point.
It just stands to reason that someone is going to start filling the void in security tokens. The present system, where they were used, only offers them to "accredited investors". This is one way Wall Street (and the wealthy) insure that most are excluded for participating.
Here is where we see how the rich get richer.
Imagine being able to take some of your crypto earnings and being able to buy a piece of some prime real estate in a major city.
Right now, if you can come up with 7 or 8 figures, you can get in the game. Absent of that, you are on the outside looking in.
Security tokens can change all that.
We will see how long until they start appearing on a large scale.
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