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There is a multi-trillion-dollar world out there.

Illiquid, privately held assets ready to be tokenized on the blockchain. Security tokens are the most logical connection between classic finance and blockchain, giving benefits to both.

Even if the security token offering (STO) market is still young and in the early stages of development, it shows potential in the entrepreneurial and finance scene. Some companies, banks, and institutions are already pioneering new financial products.

This decade will certainly see the rise of this unique type of token, which represents one of the most promising applications of blockchain technology yet.

Let’s look at some of the most significant examples within this industry to understand what has already been done. 

Fusang receives green light for $10M equity-token IPO

Fusang Corp, a Digital exchange operator in Asia has received regulatory approval to conduct Asia’s first initial public offering via blockchain-based equities.  Malaysian Regulators approved Fusang’s application to list its own token as an equity IPO.

Fusang is planning an IPO of 2.5 million FSC (Fusang Corporation) equity tokens valued at $4 each to raise $10 million.

The FSC equity tokens will be issued on the Ethereum blockchain and listed on Fusang Exchange by the end of Q1 2022 for both institutional and retail investors. FSC tokens will directly represent shares in Fusang Corp, with a direct stake into the company. This approval clears the path for the world’s first IPO of fully regulated equity tokens.

LuxSE admits security tokens issued by SocGen

Luxembourg Stock Exchange announced that three security tokens issued by Societe Generale (SocGen) have been listed on LuxSE SOL.  These are the very first financial instruments registered on a public Distributed Ledger Technology (DLT) on LuxSE’s Securities Official List.

The three security tokens are digital-covered bonds and structured products that have been issued and deployed by Societe Generale’s digital assets arm, Societe Generale – FORGE (SG – FORGE), natively on the Ethereum and Tezos public blockchains respectively.

LuxSE SOL listings are relatively low-cost and don’t require substantial disclosure. Characterized as financial instruments and debt securities under French law, the OFH Tokens are compliant with the CAST[i] open-source interoperability and securitization framework.

The stock exchange engaged with blockchain early on. In 2016 one of its subsidiaries, FundsSquare founded FundsDLT, which tokenizes funds for distribution. Other backers include Deutsche Boerse’s Clearstream, Credit Suisse, and Natixis. UBS recently completed a trial.

However, the security tokens are not tradeable via the exchange. This announcement is purely a listing to give the securities a higher profile and indicative prices.

SEC Approves First National Blockchain-powered Boston Security Token Exchange

A joint venture between the Boston Options Exchange (BOX) and crypto tokenization firm tZero has been granted regulatory approval to operate a bourse utilizing blockchain tech for its settlements and market data.

The US Securities and Exchange Commission (SEC) gave the “Go ahead” to the Boston Security Token Exchange (BSTX) for its Market Data Blockchain product following a lengthy rule review process, according to an SEC notice on Wednesday.

The move marks the first time the SEC has granted approval for a national blockchain-enabled securities exchange. BSTX will serve as the listing market for eligible companies and issuers of exchange-traded products.  In addition, BSTX will also use blockchain technology to help investors experience faster transaction times on the same day (“T+0”) or the next day (“T+1”), instead of the standard two business-day (“T+2”) settlement cycle sported by traditional markets. 

While the SEC has previously denied BSTX permission to offer crypto-focused services, the latest approval allows the facility to use a proprietary market data feed, BSTX Market Data Blockchain.

Stay tuned and continue following Blockinvest Blog, we are periodically writing about the digital assets market and keeping track of the most relevant updates across the globe.

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