The concept of digital securities or blockchain security tokens has been around for a while now. In other words, the tokenization of stocks, bonds, real estate, private equity and other assets. While there is some activity from startups like tZERO and ADDX and even the European Investment Bank’s €100 million bond last year, it’s still far from being mainstream. Two startups with big-name partnerships, Ownera and Inveniam, are likely to be critical to the growth of the sector. Inveniam is backed by Apex, one of the world’s largest fund administrators. And Ownera reckons security token lift-off could be next year.
The benefits of tokenization include fractionalization, lower issuance costs and improved liquidity for alternative assets like real estate and private equity.
At the Security Token Summit earlier this week, Ownera’s CEO Ami Ben-David had a similar but nuanced perspective. Firstly primary issuance typically takes two months and can be radically reduced. Additionally, security tokens will enable secondary trading, which is non-existent for some of these assets.
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