The State of the Security Token Ecosystem: Token Issuance and Primary Trading Platforms

Introduction

During the research, we have gathered a set of data that includes: General information about the platforms (country of incorporation, contact info, etc.), Status and features of the platforms (online/offline, number of clients, token features, etc.) and token standards. Within this article, we will share the findings of our analysis of security token platforms.

The importance of security token platforms

First, let us discuss why security tokens are highly relevant. Security tokens are issued as Security Token Offerings (STOs) and the tokens are equipped with security-related features. With the help of security tokens, real assets can be converted into digital tokens ( “tokenization”). In this manner, it is possible to transform tradable financial instruments such as stocks or profit-participation certificates into digital assets on the blockchain. In the future, this will happen in a dematerialized fashion without a certificate or commercial register entry.

Issuance platforms

For companies considering the issuance of security tokens, security token issuing platforms can be very promising and can ease various processes with respect to the emission. These platforms help by providing different services with respect to the token generation process. Hence, the tokens can be emitted within a shorter time frame. This is an essential advantage of STOs compared to Initial Public Offerings (IPOs).

Primary trading platforms

On primary trading platforms, the issued tokens are traded for the first time. These platforms make it easier to reach more potential investors. As a consequence, clients can receive their respective funding more quickly since the matching process of supply and demand is designed in a more efficient way.

Security token platforms by country of incorporation

Let us now turn to the analysis of existing platforms. When it comes to the global distribution of the token platforms, it can be seen that North America and Europe account for almost 90% of all platforms.

Source: Own analysis.

Token issuance platform features

20% of security token platforms have announced or have already conducted STOs on their own. Even though the main goal of STOs is to raise funds, it also implies that the platform is capable to successfully issue tokens and raise funds.

Conclusion

Security token platforms’ dynamics have a lot in common with STOs. Almost 90% of them are located in North America and Europe. Asia is still trying to catch up, even though we can see there is more progress compared to STOs.

Remarks

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Jonas Gross

Jonas Gross

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Jonas Gross is Chairman of the Digital Euro Association (DEA) and Head of Digital Assets and Currencies at etonec. Further, Jonas holds a PhD in Economics.