LOS ANGELES, CA / ACCESSWIRE / December 24, 2021 / This Christmas, as Mariah Carey re-fills our homes, many will take their first steps into the metaverse, buy their first crypto, or learn that there is a thriving market for $ 250,000 digital primate art – and no, you can’t just take a screenshot of them.
My goal with this article, however, is to keep you one step ahead of your savvy NFT uncle who listens to Gary Vee on TikTok.
Brief recap of 2021: Cryptocurrency has seen a meteoric rise to fame and NFTs have entered the race for the face of digital assets. Almost $ 30 billion has been spent on NFT and Crypto has remained above a trillion dollar market cap since January.
NFTs and Crypto have been successful for a variety of reasons, but they basically exist because of the blockchain’s ability to bring near bulletproof level verification and security to the internet age. For the first time, scarcity can exist on the web.
However, what you won’t hear about at the table this Christmas is how blockchain was introduced to the securities market as well. While it might not sound as exciting as the latest puppy-themed crypto, I’m here to tell you that it’s cooler than CorgiCoin (yes, that’s a thing).
We’ll cover the top five reasons why Security Tokens (STOs) will be the topic of vacation talk sooner than you might think.
Before explaining why the digitization of securities is the inevitable way forward, let’s lay the groundwork by mentioning the resolved issues currently faced by users of traditional securities markets:
Restricted – If you buy or sell stocks, you have a shortened window in which you can carry out these transactions. The two major US exchanges, the New York Stock Exchange (NYSE) and the Nasdaq, are in New York and are open Monday through Friday, 9:30 a.m. to 4 p.m. EST. Trading can take place outside of these hours with before and after market access, but fees tend to be higher and liquidity lower.
Restricted participation – It is not uncommon for the prices of individual stocks to become prohibitive to reach thousands of dollars, thus excluding a majority of retail investors. Fractional trading has tried to solve this problem but still faces its share of complications: shareholder rights, tax problems, accumulation of fees, illiquidity, etc.
Restricted regulation – When trading in shares, settlement generally takes place two business days after the order execution day, or “T + 2”, which means the trade date plus two days. Sadly, almost nothing in the paper-based world of finance is happening “NOW”.
The good news is that these institutional inefficiencies can only exist as long as digital securities are embraced and blockchain technology shows its true potential in the SEC-compliant realm.
According to the Quinlan report released in September, Cracking the Code: The Evolution of Digital Assets Towards the General Public, there are models confidently projecting security token issuance volume of over $ 4 trillion and trading volume of over $ 160 trillion by 2030, with a huge increase to come after 2025 due to regulatory pressures.
Okay, we did. Here are the tips you’ll outdo your uncle with at Christmas dinner. Why Security Tokens Will Win This Decade:
1. Easier to access
Access to a digital asset broker like tZero is 365 days a year, 24 hours a day. In comparison, the Nasdaq is open for trading 253 days this year at 6.5 hours a day – 7000 hours of trading available less than tZero. More availability means more access in more time zones.
2. Easier to participate
Digital assets such as security tokens or cryptocurrencies are divisible and can be split into very small amounts. For example, a single Bitcoin is worth around $ 50,000, but it can be broken down into a unit that is worth less than 1 / 50th of a dime called Satoshi. About 25% of the S&P 500 are companies that trade in the $ 200 to $ 5,000 / share range. These higher minimum investment amounts limit access to retail buyers who represent 20-25% of the market. In addition, the splitting is done without human help!
3. Easier to adjust
No need for third-party intermediaries such as a transfer agent or clearinghouse to verify transactions. All of this is managed by blockchain. This means near instant settlement for all transactions. No more waiting times. It turns out that computers are faster than humans.
4. Easier to manage
No more paper. Securities today are made on paper. The paper is then made digital but the traditional market is ultimately based on paper. For this reason, there is a growing movement towards government regulation that would shift the tides towards a purely digital environment. The Securities and Exchange Board of India kicked off by ending all physical certificates in 2019. The European Securities and Markets Authority is now doing the same by limiting all issuance after 2023 to digital and terminating all paper contracts by 2025. This creates a golden opportunity. so that the titles supported by the blockchain are in the spotlight.
5. Easier to report
In order to remain compliant, financial institutions must submit to reports from all parties involved in executed transactions and subsequent verification processes. Each institution proceeds differently with different documentation methods, leaving a glaring lack of uniformity for regulators. Security tokens create a simple, standardized and secure ledger for reporting, creating a more efficient solution for both private and public sectors.
If your uncle really knows his stuff, here’s what he’ll ask next:
“Of course that makes sense, but how do companies create security tokens for their shareholders and is this happening today? And if so, which companies? “
Excellent question, uncle. *thumbs up*
In order to conduct a private or public offering with security tokens, companies must work with a digital securities platform like Offer box to create an SEC-compliant fundraiser or to prepare for listing on an Alternative Trading System (ATS) like tZero, where you can find many of the largest publicly traded security token offerings.
For publicly traded offerings, Deal Box also serves as a digital securities marketplace for accredited investors to find cutting edge, highly vetted companies who understand the value of blockchain and what it brings to our old version of. Internet.
For example, one of the first announcements in the Deal Box Marketplace is Total Network Services (TNS), a company that created the world’s first blockchain-based service for telecommunications supply chain security, device management and software licensing currently run by members of the Telecommunication Industry Association.
So who will win next Christmas, your uncle’s NFTs or your STOs?
It’s thanks to innovative companies like Total Network Services that you can confidently tell your uncle that even if he may someday make millions on NFTs like Logan Paul, you will give him a chance for his crypto with your newly discovered foresight in the future. actions.
Thomas carter, Founding President of Deal Box, Inc; CEO of Total Network Services Corp “TNS”
Read about Thomas: “This FinTech Veteran Makes Cryptocurrency Seed Funding Legitimate“; connect to LinkedIn and Instagram.
THE SOURCE: DealBox
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