In recent months, millions of people have entered the crypto market by purchasing NFTs for hundreds of millions of USD.
Crypto art has been around for over half a decade, but for many people outside of the crypto world, these digital assets, known as non-fungible tokens or NFTs, came out of nowhere.
And indeed, now the whole world is talking about NFTs. From retail users to some of the biggest gaming, entertainment and fashion companies.
The artists are getting richer and with them the gamers and savvy buyers. However, just like NFTs 12 months ago, today a part of the Blockchain industry still remains unknown to the Mainstream public. We are talking about security tokens.
An unexplored field, but one that will not remain in such a state for long.
Unlike the previous categories of tokens, these are real financial instruments, and as such, they fall under a much more stringent regulatory framework.
Many analysts point to security tokens as the asset class of the decade.
The global listed trading volume of security tokens is expected to grow to $162.7 trillion by 2030, with total security token issuance worth more than $4 trillion over the same period.
A Security Token is simply a tokenized share of an asset – typically a share of a business, but often also used for real estate and other alternative asset classes (NPLs, Funds, Debt etc).
These differ from utility tokens which have a value linked to use and function.
Trillions of dollars of assets are waiting to be tokenized through the blockchain, a process that has unique potential compared to traditional fractional ownership structures because it allows players from all corners of the globe to enter this market.
A tsunami of liquidity will transform the financial markets as we know them today.
There are many reasons why these tokens will revolutionize the markets. One of the main ones is due to the programmability of the tokens themselves.
For example, classic stocks are just paper or electronic representations of ownership of an asset, and they sit there, unopened, without any functionality.
Security tokens, on the other hand, can use smart contracts to program variable functions that can eliminate many intermediaries and ultimately replace many back-office jobs.
Dividend payments, schedules, corporate governance through corporate actions, and potentially even voting or proxy can be programmed. And much more.
There will no longer be a need for many administrative or back-office roles because these functions can be embedded in the token itself.
But not only that, security tokens also give you access to markets 24/7, have extremely low fees, and provide greater liquidity as you are able to access a global market.
The digital revolution is unstoppable and is changing every aspect of life. So, it’s only a matter of time before you enter the realm of securities.
If you want to find out how to take advantage of this opportunity, book a demo.