Blockchain technology and the associated applications such as cryptocurrencies are among the major developments that have fundamentally changed not only the financial industry worldwide and will change it even more in the future.
In this context, we are also hearing more and more about security tokens. Are these digitized tangible assets or assets among the buzzwords that will quickly disappear again, or are they sustainable innovations?
If numerous experts are to be believed, the answer to this question has long been yes. However, the concrete preparation and implementation of security token offerings is still unclear. No gold standard has yet been developed in this area. This is exactly where a new whitepaper series comes in and sheds light on the subject.
Advantages of blockchain tokens
The advantages of Security Token Offerings, i.e. the digital packaging and issuance of tangible assets and assets as well as e.g. license, usage and profit participation rights, are obvious - both for issuers and investors. While it used to be almost impossible to share illiquid assets such as paintings or classic cars and make them investable and tradable for a large number of people, this can now be implemented very easily with the help of blockchain technology.
In addition, digitization also offers advantages in this area in the form of lower transaction costs, which in turn benefit investors. The tokenization trend is now also attracting the attention of institutional investors: according to Kyle Sonlin, founding partner of Security Token Group, 39 of the world's 100 largest banks are currently involved in the development and implementation of blockchain applications or STOs.
Whitepaper Series on Security Token Offering
Together with more than 20 experienced partners from the blockchain, finance and banking industry, area2invest presents the central aspects of this new type of financial product in a whitepaper series entitled "STO 101: Anatomy and Context of Security Token Offerings", detailing what issuers and investors need to know and consider.
"In our experience, however, security token offerings still have some ambiguities in practice for both investors and issuers. No gold standard has been established yet. This is exactly where we would like to start and offer guidance around the topic." - Bernhard Thalhammer, Head of Issuer Relations at 21finance & area2invest.
The six-part whitepaper series explains and provides answers to key questions around the topic of Security Token Offerings:
- What steps need to be considered when conducting a Security Token Offering?
- Which factors influence the placement success of a Security Token Offering?
- What is the current status on trading Security Token Offerings on the secondary market?
- Is an increased entry of institutional investors into this segment to be expected?
- What conditions need to be met in order to make Security Token Offerings suitable for the masses, also with regard to additional investors?
- What are the costs of an STO compared to a conventional issue?
The first whitepaper "Guide to Structuring" explains with numerous examples and expert opinions which concrete steps are necessary to successfully carry out a Security Token Offering.