Welcome to this month’s edition of Tokeny Insights.
Tokenization is happening. The question is, which assets will be the first to become widely adopted on the blockchain? Small and medium-sized enterprises (SMEs) certainly need easier ways to access global capital and therefore attract a lot of attention. However, defining the value of a company and the risk of investment can be challenging for investors. Most probably, debt instruments will be tokenized first. Bonds and loans are usually simpler financial instruments than equity, as companies can have very complex shareholder agreements.
The European Union (EU) decided to help SMEs benefit from the power of digitization. In July 2018, the EU effectuated a new law, and has allowed companies to raise up to EUR 8 million every 12 months through the use of a prospectus exemption. This means SMEs can directly target European retail investors, with a minimum amount of legal work. To know how much your company can raise with this exemption, you can have a look at our summary.
Last month we launched ST8.fr, a digitized financing initiative designed for French SMEs who are looking to take advantage of this EU regulation. By combining this with blockchain solutions, companies can digitally onboard retail investors and benefit from an increased time to market. We are proud to have launched this fully digital experience with Havas Blockchain and Psion Finance.
If you have any thoughts or questions then let us know. As always, here’s a curated summary of key updates in the security token industry over the past month.