Many expected the security token industry to take off last 2019. However, it failed to live up to the hype. Over the past 12 months, investor scrutiny increased, mainstream adoption of security tokens didn’t happen and a number of publicized security token deals weren’t able to come to fruition.
Security token expert Marvin Steinberg, who is also the founder of CPI Technologies, says that the slow adoption of security tokens in 2019 is nothing to worry about because there is a big possibility that 2020 will mark the year of security tokens. His company and other blockchain-related companies are continuously striving to educate investors, institutions and businesses about what security token offerings (STOs) have to offer.
Advantages of doing STOs
On a recent interview, Marvin Steinberg shared that “The security token offerings use the idea of the ICOs, but they also offer investors something tangible with the digital voucher. These can be profit sharing, promissory notes or bonds. With such tokens, STOs are similar to traditional securities and are therefore subject to exchange supervision. As a result, STOs are legally binding investment contracts that can give investors shares in a company, dividends or voting rights.”
Listed below are the other advantages he mentioned.
- Investors can gain more legal protection because companies are subject to regulatory approval regulations.
- Startups are encouraged to create long-term projects and not just look at short-term gains.
- Companies can easily gain the trust of investors.
Security token top news in 2019
- The Financial Conduct Authority (FCA) in the UK conducted consultations to determine how it should regulate crypto assets. After several months, it came to a conclusion that security tokens fall under its regulatory scope.
- Several businesses in the UK were able to test the security token market under the regulation of FCA.
- TokenMarket’s STO was able to raise £240,000, which is 158% of its funding goal, within two weeks only.
- 20|30, a London-based company, collaborated with the London Stock Exchange (LSE) and issued tokenized equity worth £3,000,000.
- A bill in the State of Maryland, which seeks to allow blockchain technology companies to record stock issuance, management and transfer, has been passed.
- Securitize helped tokenize 10 security tokens.
- Harbor announced that it will tokenize real estate funds worth $100 million.
- BaFin, a securities regulator in Germany, approved a number of STOs which include the Fundament and Bitbond STOs. Bitbond was able to raise over £2.1 million while Fundament got regulatory approval to tokenize £250 million real estate assets.
- Using blockchain, China issued bonds worth £3 billion. It also announced that it is continuously developing regulatory rules for STOs.
- iSTOX, a company based in Singapore, was able to complete the world’s first issuance, trading and custody of security tokens all on a single integrated platform.
2020 Predictions for the STO market
Martin Steinberg suggests that investors and companies can expect a lot of great news this year because of the reasons discussed in-depth below.
- Greater regulatory clarity
Regulation will come and can benefit all parties, including the regulatory authorities, companies seeking to get funds, blockchain companies helping tokenize assets as well as investors.
In 2019, some countries were able to successfully regulate and implement security tokens. However, there are still some regulatory questions that still remain unanswered up to now. Moreover, many countries weren’t even able to touch this subject yet.
This 2020, greater regulatory clarity will come. The blockchain and security token industries are both gaining popularity, recognition as well as credibility so clearer regulations are expected to come soon. Many companies are also working side-by-side with regulators to make sure that they are following all the guidelines and are giving suggestions on how the STO industry can be further improved.
- Institutional investors will participate
Once STO regulations are much clearer, many institutional investors are expected to participate in security token offerings.
Earlier this January 2020, Visa, a well-known payment processing company, unveiled its plans to create a Visa Token Service (VST). It seeks to help the company facilitate the money transfer process and provide better user experience to its customers. It is expected that the VST participants will process up to $1 trillion. The VST will work with its Visa Checkout system.
Since several famous companies are now heavily interested in blockchain and security token offerings, regulatory authorities will more likely speed up the development of the STO legal framework in their countries. This will then urge more institutional investors to take STOs more seriously and invest some funds.
How CPI Technologies can help
CPI Technologies allows companies and startups to turn almost anything into a digital asset. It can make tangible products, company or private assets to intangible assets.
Through the leadership of Marvin Steinberg and Maximilian Schmidt, CPI Technologies was able to help blockchain startups get funding worth $300 million in 2016 and 2017.
It has teams dedicated for IT and marketing projects and they work closely with their clients. In order to keep an eye on current blockchain developments, they are also in constant contact with the teams of major cryptocurrency exchanges such as Binance, OKex, Coinmarketcap and other blockchain experts based around the world.
Moreover, it offers a platform that makes it easy for all kinds of companies to start their STOs. Through the platform, investors will immediately get their tokens after depositing their funds. Once all the tokens have been purchased, the companies will get access to their funds and the token will be automatically listed on an internal exchange. All STO investors can also participate and vote for decisions through the blockchain platform.
Steinberg Invest, the investment branch of CPI Technologies, helps innovative entities raise capital and find the right investors, thereby establishing a solid foundation for their business development and growth.
Steinberg Marketing, the marketing branch of CPI Technologies, offers full-stack marketing services that can help companies gain explosive growth.
To know more about Marvin Steinberg and his companies, check out the links below.
Websites: https://cpitech.io/en, https://steinberginvest.de and https://steinberg.marketing
Facebook: https: //www.facebook.com/steinberg.marvin