Welcome to 2019’s final edition of Tokeny Insights.
It has been a transitional year for the industry and also for Tokeny. We worked with more than 20 issuers of securities, small and big players, for real estate, equity, funds, and even commodities. At the beginning of 2019, most of the projects were small companies running online token sales via STOs. Some of these projects failed because of the lack of education in the market, the assets weren’t attractive enough for investors or because of the lack of awareness amongst institutions.
This has changed significantly in the past 12 months. Granted, the ecosystem is still building, particularly on the distribution side, but some important developments have been made. Throughout the whole year, sizable projects were announced at large financial institutions. Many of these firms have brought a tremendous amount of credibility to the space by tokenizing hundreds millions of debt, funds or real estate securities. Significant investments were made from these firms in the most promising fintechs, something which was absent in the yesteryears of the wild wild west. One by one, banks are announcing asset tokenization projects. What’s more, the assets attracted to digital capital markets are becoming more robust and attractive for investors. The next step is liquidity.
Let’s face it – financial institutions are now all convinced that tokenization will happen, and sooner than initially expected.
So, what will cause the industry to grow further? Here’s a quick summary of points that will act as a catalyst for the industry in 2020:
- Financial institutions will reduce their internal developments of blockchains and adopt the standards of this new industry. Permissioned blockchains will be replaced by permissioned tokens.
- More central banks will announce digital currencies pushed by Libra, the Chinese and other big nations encouraging adoption.
- There is mounting pressure on margins for big institutions, with some beginning to collapse. Change is needed. Blockchain projects will emerge, driven by business departments and not by innovation functions.
I’m looking forward to hearing your comments on what will drive the industry forward in the new year. Have a great Christmas and speak to you in 2020.
Significant news and insights selected by our team of security token experts
State Street Slashes DLT Developer Team as Bank Rethinks Blockchain Strategy
State Street, the global custodian bank, has taken a new direction with its blockchain strategy and cut scores of developer jobs in the process, people familiar with the situation said.
Deutsche Börse and HQLAX Launch Sec Lending DLT Platform
Deutsche Börse and HQLAX successfully launched their jointly developed Distributed Ledger Technology (DLT) solution for frictionless collateral swaps in the securities lending market.
HSBC Pilots Blockchain Securities Tracking
By March, HSBC will swap out the paper and pen for blockchain to track $20 billion of assets.
Bank of China Issues $2.8B in Bonds for Small Businesses Using Blockchain Tech
One of the four major commercial banks in China has issued 20 billion yuan ($2.8 billion) in blockchain-based bonds for small and micro-sized enterprises.
Explained: Ethereum’s Next Stage of Development
An article that covers the two phases of the Istanbul hard fork and a look ahead at the long awaited Ethereum 2.0.
Japan’s Security Token Association partners with Luxembourg’s Tokeny Solutions to Nurture Security Token Ecosystem
Japan’s Security Token Association (JSTA) has entered into an agreement with Luxembourg security platform operator Tokeny Solutions to progress Japan’s security token ecosystem.
Brave New Coin
Report: Bank of France to Test Digital Currency in 2020
The central bank’s governor François Villeroy de Galhau said that the bank will start testing digital currency soon and will launch the first projects in Q1 2020.
COMPLIANCE IN FOCUS
Compliance and regulatory news curated by our team of industry insiders
Germany’s Regulatory Framework for Blockchain
An overview of the legal framework and key issues surrounding international arbitration law in Germany.
Cryptoassets and Smart Contracts Valid in English law
Assets and contracts created with blockchain-type encryption technology have validity under existing English law, asserted by a high-powered group of legal experts.
Singapore Announces Two Key Fintech Regulatory Initiatives Re Digital Assets and Payments
Facilitated by the Monetary Authority of Singapore (MAS), the Association of Cryptocurrency Enterprises and Start-ups, Singapore (ACCESS) has developed a Code of Practice.
Switzerland to Tweak Laws of Blockchain and DLT
On Friday the Swiss Federal Council published a report on blockchain, distributed ledger technology (DLT) and the law.
French Central Banker Advocates for Blockchain-Based Settlements in Europe
The central bank of France wants the eurozone to build a blockchain-based settlement system that will move euros more quickly and at less cost than with existing technologies.
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