Welcome to this month’s edition of Tokeny Insights.
When securities only existed on paper, investors needed a party that was able to securely store, safeguard and administer those certificates of value. Today, even with powerful IT systems, custodians operate in the same way. They still store, take care of the delivery (i.e. settlement) and the servicing of the asset. As we have witnessed, advancements in technology can change the way a market operates, but the essence of custody has and will not change as we look to the future.
Custodians are not without market headwinds. Today, these actors face increasingly diverse and complex servicing demands from clients, leading to high IT costs to report on new asset types. Strong market competition from other custodians, newcomers such as neo-banks and market infrastructures like CSDs exacerbate their difficulties. These factors combine to make it an increasingly tougher space and force custodians to look for economies of scale.
As we move into the new era of finance, digitised, validated and data-rich assets will allow custodians to streamline existing processes and open the door for new revenue streams. Currently, most custodians spend millions a year on information technology to keep their operations and pricing competitive.
In a world where all assets are dematerialized on a shared and decentralized infrastructure, there is a reduced need for these IT spendings. Identities are secured and reusable, compliance is enforced in every transfer, registries are automatically updated and assets embed actionable data. New revenue streams can be identified by programming, deploying and servicing smart contracts for digital assets.
However, custodians need the tools to allow them to put this into practice. They need a digital ownership system that allows for the management of assets through secure access controls. That’s why we’ve built a complete suite of white-label solutions for custodians. We look forward to updating you on how this initiative progresses.
Any comments then please let me know by replying to this email.
Significant news and insights selected by our team of security token experts
Morningstar Is Building A Blockchain Bridge To The $117 Trillion Debt Securities Industry
Morningstar Credit Ratings is making a number of previously unknown moves into the burgeoning industry of assets issued on a blockchain.
Swiss Stock Exchange SIX Launches Digital Assets Exchange Prototype
Swiss stock exchange SIX has launched a pilot version of its exchange and central securities depository (CSD) for digital assets.
Digital Assets Will ‘Trickle, Trickle, Trickle—Then Flood,’ State Street
State Street is getting ready for blockchain, a record-keeping technology made famous by Bitcoin, the original cryptocurrency.
Six major brokerage firms congregate to form the Security Token Offering Association in Japan
Six leading brokerage firms from Japan have come together to form the Security Token Offering (STO) Association in Tokyo.
Wesley Snipes To Tokenize $25 Million Movie Fund With Security Tokens
Wesley Snipes is teaming up with Liechtenstein Cryptoassets Exchange (LCX) to tokenize a $25 million movie fund. The fund will be used to invest in the production of both films and tv shows.
KPMG Report: Tokenization will be Huge
KPMG has published a brief report on blockchain and tokenization. According to the authors, tokenization will be huge and the tech is “poised to transform commerce.”
Crowd Fund Insider
China Merchants Bank’s Latest Crypto Partnership Includes STO Investment
The Nervos Network STO kicks off on Oct. 16, aiming to raise an undisclosed amount within two weeks through the CoinList platform.
COMPLIANCE IN FOCUS
Compliance and regulatory news curated by our team of industry insiders
Overstock Executives Face Securities Fraud Lawsuit
The lawsuit alleges that Overstock failed to disclose its losses to investors accurately and that the company pursued a flawed crypto strategy instead of focusing on the original business model.
Security Token Regulations In Singapore: The Current Situation
Security tokens in Singapore currently fall under the country’s Securities and Futures Act (SFA). However, the country has an added legal dimension when it comes to security tokens.
Hong Kong’s Securities and Futures Commission Updates Digital Asset Regulations
Hong Kong’s securities regulator, the Securities and Futures Commission (SFC), has released an updated regulatory framework for digital asset fund managers.
Crowd Fund Insider
Subscribe to the newsletter: