2020 looks promising for security token offerings (STOs) mainly due to much-improved infrastructure technology, lower costs, and thoughtfully-designed platforms in 2019. The emergence of a critical custody and control industry is another factor that will help bolster STOs in the coming year.
Launched in early 2019, the Codefi blockchain operating system (OS) was developed by ConsenSys in partnership with the Satis Group. The OS utilizes blockchain technology to optimize business processes and payments, as well as build customized decentralized applications and digitize financial instruments such as STOs.
Despite technological developments, the STO deal flow slowed in 2019, according to an op-ed by Emma Channing, CEO of the Satis Group and a FINRA Registered Representative with ConsenSys Digital Securities. Notable exceptions include Blockstack’s successful Regulation A+ STO offering. Channing notes that overconfidence on Regulation A+ filings has led to significant delays and failed offerings.
The Satis Group CEO has suggested that the STO industry needs to provide a rationale beyond greater liquidity and take advantage of a full suite of blockchain technologies if it is to progress further in 2020. Furthermore, STOs need to be designed by properly qualified brokers who can provide STOs with features exceeding what traditional capital markets offer.
Much of the key infrastructure and markets are now in place to a technological standard we could have only dreamed of two years ago. It’s now just a question of finding the right issuers, the right products and the right purchasers. Ultimately, we remain confident given the developments of the last two years that STOs will become commonplace across public and private markets.
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