Coming into 2017, they are a lot of start-ups. They are issuing these digital assets and through 2018, it was sort of a, little bit of the same. We also start to see a lot of the experimentation with institutionalize and that’s the one thing we consistent in 2019, a they is a lot of institutions taking a look at the space.
Looking at different pieces of infrastructure that they need to stand up to start issuing digital assets on the block chain and there’s a lot of activity in that space we seeing.
Now we’ve been talking about sort of your travels and you’ve got a really, unique insight from your global focus. To how people are responding or the different appetites for security tokens and being involved in the space, from different places around the world.
What are you seeing in Asia in particular, from maybe both sides of the deal?
Yeah. So, I think that you know the security token mark is being driven from an innovative stand point here in the U.S. The Asian markets are just kind of just a little bit of a ‘wait and see’ approach. Let’s watch the Americans do this and then kind of catch on, once we see some momentum coming out of the U.S. But with that said, they are still very sophisticated on the standard market, well and potential for this market will identify that, the security token is going to ‘dwarf’ the size of the cryptocurrency market and that sentiment is felt also in Asia.
Where crypto is very popular and probably more than it is here in the States. But you know, we’ve spoken with, you know multi-billion dollar asset managers in Asia who’ve managed to buy security tokens now. I think you know, there’s still exploring what kind of products they want to buy. But they do see as a means to have greater and wider access to investment products in different parts of the world which otherwise, through traditional markets it would be harder to access.
We still at the very beginning of the industry, which is great for anyone that wants to join because it’s a fabulous industry with a lot of potential to really revolutionist the entire way we look at money and investments.
Yeah, I think the world of securities is very complex. There’s a lot of different licenses you need to do, to do different things. I think the good sign is when it comes to institutions, they already have the rogatory cover to do a lot of these things. They can take a more stand box approach and start with experiments and then go larger and so I think it’s a lot figuring out what all the pieces are for the institutions to continue to do business as usual.
But, perhaps, augment it with additional products.
So what do you think is the inherent promise of security tokens? I guess for sort of humanity, for the world. What’s going to be different now that they are, such a thing as digitized securities that can be traded?
Sure, so I guess a lot of people talk about all of the advantages like 24/7 trading fractionation, et cetera, et cetera. But what most people that have worked in the world for a long time, realize you probably could have achieved all of those before. You know in exchange you could’ve stayed open 24/7. You could have probably listed anything globally and if you wanted to fractionize something, you could just put a piece of property into an SPV and issued millions of shares.
You know, it’s those things that could kind of been done before. But what I think, what the ICO craze did if nothing else it showed people that there’s a whole generation of people and I don’t mean it as an age thing. I just mean a mindset of people that want to be more on entrepreneurial, who really want to have access to capital markets and so it showed the people wanted to go to capital markets with their ideas and it also showed that they’re individuals that wanted to back these companies directly.
So I think you saw the, that all you had was global entrepreneurs wanting access to capital markets and global investors wanted access to product. So I think digital, I think that came about from the ICO point of view. The issue with the ICO, it’s just the way that their structures. You know, you’re owning a discount or a service or a product in the future. They so hard to get what our underpinning value is. Whereas digital security are so different, you know most of the time you’ve got, let’s say you’ve got a property that has a value. If you got a fund it has a ‘nerve’, if you’ve got company it has an elevation metric or balance sheet or whatever it may be because these are real evaluations.
It means that the value of the token is underpinned by something. As a result of that the volatility will come right down.
And it will keep investors a lot more comfort, especially institutional investors. Sorry to, just to answer your question just a bit more over. I think it’s a global market, so it has the ability to really open capital markets up globally to everyone. So you know, you can get an individual in the U.K. investing a small amount in the security base of South Korea or wherever it may be.
I think it’s quite, you know that’s why I get really excited about.
What are the biggest obstacles to success?
So, they are several. You know some can discuss regulations and custody challenges. But in my opinion the one which is the most painful today, is when I approach institutions. For example, I might tell them that, you know the whole promise of this organization is increase liquidity and they understand how. You know tokenizing can, you know streamline the back office process and make it more efficient and they get, but not right away. After you know four, five meetings they start to understand it, you know.
But, the biggest challenge right now, was this okay great so it’s more efficient. But who are the buyers? Where’s this liquidity coming from? So I tell them that they are very new exciting new , you know ATS platforms out there. But, you know their trading volume. Is not extremely high as of right now, they are growing very rapidly and I am very excited for them.
But it will take a little while before I could say that they have the volume which can really guarantee increased liquidity. So, that right now is the biggest challenge. But we are in the right direction.
There many things, that I think are going to be revolutionary. But you know some the ‘load hanging’ fruits are obviously, you going to significantly minimize the cost of back office and paper transaction which is huge for financial institutions.
We often come to events like this. In the security token space or in the crypto space and something that stands out to me is a lot of people look like me. What do you think about the demographics of our space and why is it that way and what do you think?
I think demographics are important and we trying to change the demographics of this space clearly. So that’s one my kind of mandates. But you know, what do we need to do? We all need to be open and just communal and we need to be collaborating with all different types of people and since this is a global space. We just need to be able to collaborate me more globally and kind of communicate and grab everyone that we can. Across all the different demographics.
Cause everyone has different thinking and everyone has different ideas and everyone has different capabilities. It is important to embrace all of that in this space because the hard problems are not going to get solved just by certain types of thinking and we know that looking at Google, Facebook we can name some of these other companies as well.
That when you kind of have uniform thinking, you get uniform speak and uniform kind of ideas and you know form creation. So, in order to get different types of creation, you want to kind of have a diversity of thought because that’s what’s real is, it a diversity of thought and you can only do that by listening and talking to many different types of people.
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