Aren’t security tokens just securities managed on blockchain? Pretty much, so what’s the big deal? For me it’s speed of change. Imagine someone trying to issue a new security, which has slightly off-vanilla terms, across say 5 countries on existing capital market infrastructure.
First of all you may need to get relevant CSDs to agree to support this new security e.g. possible upgrades to database schemas, processing logic etc. They will also need to figure out how to sync and reference data across their ledgers. Then the custodians will need to undergo a similar process to be able to support this new security type, and sync between themselves and the CSDs. Same exercise for exchanges, broker dealers and other market intermediaries. That’s a lot of work, and that’s just at a technical layer, which takes time – often years.
A security token with new data and business logic on the other hand can be launched in a few months, be listed on crypto exchanges and traded around the world, that’s technical implementation time not including legal and regulatory effort. Why? Because of massive re-use. Instead of each participant having to re-implement essentially same business logic, time and time again, both data and code are designed once and re-used. This means that new innovative securities targeting global audiences are likely to launch on blockchain infrastructure due to speed and cost advantages.
Related posts
Our Thinking
Sep 14, 2020 1 min readFuture of Crypto Markets: Role of Custodians and Exchanges
Trustology
cryptoassets
Jul 22, 2020 2 min readDeFi-ning Secure Storage for Cryptoassets
Trustology
cryptoassets
Jun 25, 2020 1 min readMeeting Requirements for World Class Cryptocurrency Custody
Trustology
MAKE THE MOVE
Create your TrustVault today
Experience a new standard in cryptoasset security and management.
Currencies supported






