Circle Identifies Stablecoins and Digital Securities as Emerging Trends

A Year in Perspective

Just recently, industry giant, Circle, released a report titled ‘2018 – Crypto Retrospective’. In this report the company touches on everything from marketcap, to ICO funding, and emerging trends such as digital securities.

The purpose of this report is to give industry participants a feel for what has been, and where things are going in the industry at large.

Emerging Trends

Through their research, Circle found various clear directions in which the industry is trending. For instance, these trends indicated a rising popularity in both stablecoins, and digital securities.

This suits us just fine here at securities.io, as we believe that digital securities have the power to transform investing. While ICOs were wildly popular in 2017/18, they were simply a precursor, giving rise to the STO.

Security Tokens

Circle attributes the shift in focus from ICOs towards STOs to increased scrutiny from regulatory bodies. Beyond regulatory oversight, they note various aspects of security tokens that have piqued the interest of accredited investors everywhere.

• Fractionalized ownership
• Global investor pool
• Ease of issuance

While digital securities have, by no means, been perfected yet, the allure of these aforementioned benefits is huge.  As a result, various companies recognized this, resulting in infrastructure being developed at a rapid pace throughout 2018. These companies range from issuance platforms, secondary markets, and those that offer end-to-end solutions.

Closing words

Circle closes out their report on a positive note. Here is what they had to say regarding the present and future state of blockchain:

On security tokens…

“While not many security tokens have been issued yet, 2018 was the year of building out the underlying infrastructure and we could see increased issuances in 2019.”

The industry as a whole…

“The market downturn has led to the revelation that this technology is still in its very early stages and that the economic growth of the crypto market in 2017 did not match the nascent underlying activity and adoption. But it’s important to recognize that the pullback was necessary, and that after the last year, the value proposition of Bitcoin and other crypto assets is stronger.

Over the next year, expect to see strides made in addressing scalability, security, and interoperability challenges, improvements in user experience, an increase in institutional interest as institutional-grade infrastructure goes live, greater regulatory clarity, and experimentation with the tokenization of new and existing, tangible and intangible assets”

SeedInvest

It is not surprising to find that Circle believes security tokens to be an emerging trend. This past October, Circle announced the acquisition of SeedInvest. By acquiring SeedInvest, Circle gained the ability to provide broker/dealer services to its clients – potentially setting itself up to offer security tokens in the future.

Upon acquiring SeedInvest, Allaire commented to Bloomberg, “The power of tokenization is that more and more types of assets can be represented in a liquid, tradeable form. It’s also very powerful because in theory it creates a way for smaller businesses and mid-size businesses to more directly raise capital. And I think part of the benefit is that you can make those assets available through global markets, over the internet, and make those available not just to accredited investors but also to mainstream investors and unaccredited investors. And that’s something I think SeedInvest really pioneered.”

Circle

Circle is a financial services company, which operates out of Boston. The company was founded in 2013 by Sean Neville, and Jeremy Allaire.

Since their inception, Circle has managed to grow in to a powerhouse. Recognizing the potential of cryptocurrencies, Circle made waves last year with the $440 million purchase of Poloniex.