Tokenestate, based in Switzerland, has transferred the world's first blockchain-based digital equity on the Ethereum blockchain. The transfer is just one of many innovative security token developments on Ethereum, suggesting that the blockchain is positioned to drive the new FinTech revolution: the tokenization of the financial securities industry.
As Tokenestate has issued the first digital equity in the world on Ethereum
On 22 November 2018, Tokenestate transferred the first self-proclaimed digital capital to the world using blockchain technology.
The CEO of Tokenestate, Vincent Trouche, commented on the transaction via YouTube:
"Today we conducted the first digital sharing transaction, which is the first in Switzerland and the first in the world, which is a milestone for us, but also for all private companies today, companies can legally represent a net equity using blockchain-based tokens and have investors who buy and sell shares digitally ".
The sale was made via the Tokenestate platform, which is ultimately Software-as-a-Service (SaaS). It offers companies-compliant means for the issuance and management of digital securities, which are commonly referred to as "security tokens".
More specifically, the transaction entailed a movement of digital assets based on blockchain that represent shares of Tokenestate SA in exchange for Swiss francs on the Ethereum blockchain.
How security tokens will help private companies in a revolutionary way
The Tokenestate platform aims to help private companies raise capital efficiently while maintaining private status.
They provide services that involve the initial collection of funds from private and institutional investors, the facilitation of secondary market negotiations, the verification of KYC and AML compliant with Swiss standards and the general management of securities in tokens.
The real value offered, it is said, is the enabling of private broadcasters to manage a large number of investors in a user-friendly way. They do this by digitizing many processes, such as voting, which previously required the use of additional parts.
The culmination of these services translates into private companies that have a new method to raise capital. Despite the ongoing regulatory concern in the cryptocurrency space, this concern has no place in security tokens, according to the Tokenestate.
Florian Ducommun, Tokenestate's legal advisor, discussed the regulatory requirements for Swiss security tokens:
"In Switzerland, shares of limited liability companies may be represented by – or encapsulated in – digital assets based on blockchain without the need to obtain accreditation from FINMA. However, issuers must comply with current securities legislation."
Explained the activity of the SEC and the transition to security tokens
Many leaders in the field of security tokens over Switzerland have expressed similar opinions when it comes to regulatory requirements.
Bruce Fenton has firmly stated that security tokens do not need further laws. They are simply the tokenization of traditional financial securities. All they have to do then is to respect and demonstrate in a transparent way the adherence to the pre-existing laws on the securities. The port's managing director, Josh Stein, has in particular made similar remarks.
The increased activity of the SEC, which seems to target the ICO's "utility tokens", has already had an impact on the wider cryptocurrency market. Some companies have canceled ICO and have turned to security token (STO) offers due to regulatory issues.
If such activity becomes a common theme, platforms like Tokenestate have the legitimate potential for greater success.
What do you think of Tokenstate who leads the first transaction in the world of digital equity on Ethereum? Will Ethereum maintain its position as the main blockchain for security tokens, or will it dominate another blockchain? We want to know what you think in the comments below.
Image courtesy of Tokenestate.
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