- Automated Market Maker
- Blockchain Explained
- Blockchain: Private vs Public
- Blockchain Oracle
- Cryptocurrency Trading
- Digital Assets
- Digital Banking
- Digital Currency
- Digital Securities
- Digital Wallet
- Directed Acyclic Graph
- Equity Crowdfunding
- Equity Tokens
- Hard Fork
- NFTs (Non Fungible Tokens)
- Proof of Work vs Proof of Stake
- Security Tokens
- Stablecoins Explained
- Stablecoins – How They Work
- Smart Contracts
- Token Burning
- Tokenized Securities
- Utility Tokens
- Web 3.0
Table Of Contents
Security tokens provide investors with a more secure means of participating in the cryptomarket. In its current state, the crypto space lacks regulations. While many crypto investors see this lack of regulation as liberating, large-scale investors need a more secure foundation to be in place before making their investments. These requirements are the exact niche that security coins fill.
Security coins head off future regulations by incorporating today’s financial system requirements into their platform. These requirements include Know Your Customer (KYC) and Anti-Money Laundering protocols. This legal strategy provides investors with more confidence. It also makes the cryptomarket a more attractive investment to large corporations. Let’s take a moment to answer the question – Where can I buy security tokens?
Open Finance entered the market in 2014, making the platform a pioneer in the tokenization sector. The platform developed thanks to the concerted efforts of exchange technologists, securities lawyers, and experience crypto traders. The goal of the platform is to bring more transparency and interoperability into the cryptomarket.
Open Finance partnered with Harbor to increase both firms reach in the sector. Open Finance offers a streamline compliance system. Additionally, the firm partnered with multiple financial institutions. These strategic partnerships help Open Finance provide direct integration into their platform.
Open Finance is live but currently only accepts US investors. The interesting thing is that Open Finance is powered by:
The 0x protocol provides crypto users with an integrated exchange system designed explicitly for Ethereum-based tokens. Ethereum leads the cryptomarket regarding new token creation with both their ERC-20 and ERC-721 protocols seeing growing adoption globally. The 0x protocol allows security tokens transference while remaining completely compliant.
0x is by far the most popular security token protocol in use today. The platform utilizes a combination of features including an integrated API protocol that enables users to aggregate liquidity pools for their digital assets.
In the future more exchanges will be launching using this protocol.
tZERO is one of the first security token exchanges available to the public. The concept behind the tZERO platform is simple. The developers wanted to provide investors with a blockchain-based alternative to the current financial processes found on Wall Street and other institutional structures.
tZERO incorporates a 15c3-5 risk management software that enables users by providing them with a mix of proprietary technology aimed at improving their trading capabilities. Additionally, the platform includes DLR software to ensure all participants are SEC compliant.
tZERO is currently the most popular exchange for trading security tokens.
While the above companies offer exchanges to purchase security tokens, there are several market leaders who are focusing on assisting companies with launching these tokens. These companies are:
The Polymath platform tackles these concerns by instituting a compliant protocol into their token development. Polymath utilizes the ST-20 protocol. ST-20 lives on the Ethereum blockchain. The protocol includes built-in KYC/AML checks.
Polymath gained popularity as a smart option for tokenized property such as real estate. The transfer of real-world property via token sales requires conformity to the current legal regulations governing the item for sale. You need a regulated token to transfer to transfer regulated assets.
The San Francisco-based tokenization platform, Harbor shares similarities with Polymath in that it is also mostly used for the tokenization of real-world assets. These assets can include real estate, private securities, investment funds, company equity, fine art, and the list goes on. The platform requires KYC and AML compliance for all participants across the global economy.
The Harbor platform differs from Polymath at the protocol level. Harbor utilizes the popular ERC-20 protocol. Harbor utilizes the R-token to accomplish these tasks. R-tokens are open-source and regulatory compliant from issuance to secondary trades.
A More Secure Way to Do Business
Security tokens continue to gain popularity as the cryptomarket expands. The digitization of the economy pushed these tokens into mainstream use. Now, crypto users have an alternative to the unregulated nature of the industry. You should expect to see increased development in this sector as more compliance regulations come into play.
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