Securities can be defined as investment instruments purchased and sold in financial markets, such as bonds, bonds, notes, options, shares (shares) and warrants. This means that some of them can be victims of fraud through fakes and physical thefts. With blockchain technology, such securities can be notarized – as seen with the Austrian government issuing bonds on the Ethereum network – or they can be tokenised.
A token on the ETH network is created via smart contracts and can be assigned a name and a value on the network. This ability of the Ethereum network has made it a favorite for the crowdfunding process through the ICO and will be the key to the enhancement of the traditional securities market. Tokenization will make the titles more secure and easily accessible normal boys like you and me
Progress in the European Union
The tokenisation of the securities has already started in the EU thanks to DESICO, the first EU-regulated blockchain company offering an end-to-end solution for issuing and trading token tokens. This therefore brings the opportunity to attract the much needed attention in the crypto and blockchain space, also allowing retail investors to secure their purchases on the blockchain.
The co-founder and CEO of Desico, Laimonas Noreika, said this about the future of tokenized securities:
Tokenization, together with blockchain technology, will bring partial ownership. Yes, it will bring more transparency. However, it will not change the existing securities laws. In reality, I believe that tokens need much more securitization than securities need tokens, at least at the current stage of the market.
No immediate impact and coexistence of old and new financial systems
However, it was quick to predict that the impact will not be immediate as many have hoped.
I am not sure that the tokenisation of the stocks will drastically improve the equity / equity markets, at least not in the next 5 years.
I do not believe that there is the possibility of completely replacing the traditional financial system with only tokenized securities. At best, both new and old financial systems should coexist together.
Ethereum well positioned for Tokenize Secuities
As for the best platform to start the process of tokenizing securities, The co-founder and CEO of Desico, Laimonas Noreika, added the following:
Ethereum is the only network that lives and works without major disadvantages. Furthermore, the network is under development, so we hope to have less and less limits in the near future.
summing upthe tokenizing securities will bring the necessary security and transparency needed in traditional markets, as can be seen with the issuance of bonds in Austria. The Ethereum platform has been tested over time and is able to guide this process. This means that it is urgent to increase network throughput to handle multiple transactions per second.
Disclaimer: this article is not intended to give financial advice. Any opinion here is purely that of the author and does not represent the opinion of Ethereum World News or its other writers. Perform your research before investing in one of the many cryptocurrencies available. Thank you.