Global listed security token trading volume is expected to reach $ 162.7 billion by 2030, with total security token issuance worth more than $ 4 billion during the same period.
It comes as leading analysts view security tokens as the brightest crypto asset class of the coming decade.
A security token is simply a symbolic part of an asset – usually a part of a business, but also often used for real estate and other alternative asset classes.
These differ from utility tokens such as Ethereum (ETH) which have a value related to use and function.
Billions of dollars in assets await securitization through blockchain tokenization, which particularly attracts traditional fractional ownership structures such as REITs due to the immense volatility offered by crypto assets.
Gary Gensler, the chairman of the SEC that strives to provide securities legislation to the crypto industry, explained the benefits of volatility while teaching blockchain finance at MIT.
âWhen I was at Goldman Sachs for years, we had a sayingâ¦ volatility is our friend,â he said.
âHe’s often not the friend of a lot of people in the markets, but if you’re in the world of financeâ¦ you’re in the world of risk intermediation.
âSo volatility is a form of risk, volatility has always been our friendâ¦ because it’s so volatile. “
The Quinlan Report
The findings were published by leading strategic market analysis firm Quinlan and Associates in a report titled Cracking the Code: The Evolution of Digital Assets Towards the General Public, and was commissioned in response to a request to analyze the Global Regulatory Arbitration Window.
Speaking to Coin Rivet, Benjamin Quinlan, CEO and Managing Partner of Quinlan and Associates, explained how the emergence of regulations as the industry matures paves the way for legitimate security token offerings.
âWith the increase in regulatory oversight of digital assets, we expect the regulatory arbitrage window to narrow in the years to come, causing upheaval in the larger universe of digital assets,â he explained.
“However, increasing levels of regulatory oversight now also legitimizes certain forms of digital assets, including security tokens.”
The report captures a snapshot of an industry struggling with a new maturity and describes a tale of crypto exchanges and brokerage services racing to become the first to launch the first security token exchange.
âWhile we would expect there to be a number of winners, we expect security token exchanges to be the biggest winners of all,â added the CEO.
“But the differing attitudes between those actively innovating and those left on the sidelines could see new exchanges of national security tokens spring up and form monopolies.”
With venture capitalists globally excited about security tokenization and the opportunities it offers for increased transparency, liquidity and dematerialization – all eyes are on the space.
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