This past week saw a flurry of activity within the digital securities/security token sector. Leading the way was none other than Securitize, with the company establishing a new secondary marketplace. The following is a brief rundown of this development, along with a look at what a recent report sees on the horizon for digital securities.
Secondary Trading with Securitize
One of the major hindrances plaguing the digital securities sector is a lack of secondary market options. As it stands there are precious few which offer this capability – something which opens the sector to a much broader class of investor. Recognizing the dearth of options currently live, Securitize has just announced the launch of its own secondary marketplace.
As expected, this offering is build around and will support trading of digital securities – Securitize’s speciality. These digital assets allow for more efficient and flexible investing in a regulatory compliant manner.
Securitize CEO Carlos Domingo states,
“Securitize Markets is the final critical component in creating the world’s largest, fully digital, end-to-end, regulatory compliant solution for raising and trading private capital.”
Making this marketplace even more appealing to investors, is the stable of investment opportunities ready from the get-go. These currently include,
- Hold On For Deal Life
- Bitcoin Yield Fund
- USD Coin Yield Fund
- Blockchain Capital
- SPiCE VC
- Science Blockchain
The following are also scheduled for support, joining the above assets in the near future.
- Protos Asset Managment
- Curzio Research
Securitize notes that the goal of its new marketplace is to, “…enable investors, whether individual or institutional, to participate in private capital market opportunities through a fully digital environment, without offline intermediaries, with the expectation that as the marketplace grows alternative assets will become more liquid than they have been in the past.”
Now that Securitize is at bat, Archax appears to be on deck with its marketplace offering, while various others no doubt are vying for position in the hole. All eyes will be on these marketplaces moving forward.
Cracking the Code
Digital assets continue to grow in popularity, with no signs of slowing down. In a recent report, consulting firm Quinlan & Associates took a closer look at the sector as a whole, and why this continues to be the case. Notably, this report highlights digital securities in particular as holding massive potential.
“The advent of the security token has brought about with it several advantages, including: (1) greater transparency; (2) dematerialisation; (3) enhanced asset liquidity and capital accessibility; and (4) disintermediation. While adoption levels have been somewhat muted in recent years, we believe security tokens will open the door to a legitimate, well-regulated pathway for institutional investors to participate in the digital asset ecosystem, especially given their restrictive investment mandates and overarching fiduciary duties.”
This legitimacy, efficiency, and accessibility leads to one conclusion – the digital securities sector is ripe for an explosion onwards and upwards.
“With an estimated USD 4.1 trillion in listed security token issuance volumes (and USD 162.7 trillion in security token trading volumes) up for grabs by 2030, we see an immense opportunity for players who can ultimately succeed in cracking the code.”
At this point in the game, it is clear that digital assets are here to stay. Regulators are not ignorant to this fact, and are actively working to reign in the sector. Moving forward it would be reasonable to assume that whichever token class can best benefit investors, while remaining compliance with regulations will thrive. Digital securities may just fit the bill.
“While still early days, we believe security tokens are at a major turning point and are set to fundamentally reshape the traditional capital markets ecosystem as we know it.”