There is a multi-trillion-dollar world out there.
Illiquid, privately held assets ready to be tokenized on the blockchain. Security tokens are the most logical connection between classic finance and blockchain, giving benefits to both.
Even if the security token offering (STO) market is still young and in the early stages of development, it shows potential in the entrepreneurial and finance scene. Some companies, banks, and institutions are already pioneering new financial products.
This decade will certainly see the rise of this unique type of token, which represents one of the most promising applications of blockchain technology yet.
Let’s look at some of the most significant examples within this industry to understand what has already been done.
The Ministry of Finance opens to the tokenization of financial instrument, starting from obligations
The Ministry of Finance of Italy has presented the so called “Libro Verde”, a publication including some solutions for the rebound of the financial markets, with the intent of reducing the competitive gap with the other EU countries.
Indeed, the ultimate goal of this publication is the acceleration of reforms in the Italian market as well as the increase in attractiveness of investment in Italy. This is a key component since it attracts private resources that are fundamental for the development of the digitization process and the enhancement of innovation, at the core of the PNRR plan.
The “Libro Verde” is divided into 4 chapters and a whole part of the book is dedicated to digital finance. The publication states that the government is studying a first normative phase that allows the applicability of the DLT technologies only to some financial instruments, bonds issued by limited liability companies. This transitory regime will allow companies to learn the fundamental skills on the DLT technologies as well as will highlight to regulators what are the weak points and critical important factors in this new market.
The italian platform for security tokens will be ready to be launched in 2023
Cetif Advisory has successfully concluded the first trial phase of a native platform issuing security tokens of the main alternative asset classes: investment find, real estate, private debt and equity, NPL, collectibles. To the sandbox various important institutions have participated: Bper Banca, Banca Generali, Banca Mediolanum, Reale Group e Iccrea.
The go to market date is planned for 2023, given a regulatory state that allows the issuing, placement and underwriting of financial instruments through blockchain.
From a survey conducted, the results are really interesting. 90% of financial institutions report that their clients agree on investing through tokens, indicating a great potential for this instrument if regulated on time.
INX ATS is ready to for for Securities Token Listings
INX Group, which includes regulated trading platforms for digital securities and cryptocurrencies, is planning to announce primary issuances and new secondary trading listings of regulated securities tokens.
Back in April 2021, INX closed its IPO with $83.6m in gross proceeds from more than 7,300 retail and institutional investors.
Shy Datika, co-founder and president of INX, said in a statement: “When we founded INX in 2017, we envisioned a new future of what we called ‘Capital Markets 2.0’. A vision of digital securities replacing the role of equity in the markets for capital raising and trading.”
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