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Security Tokens: The Future of Digital Asset Management

Digital asset management has come a long way from being a basic file library into a complex repository that enables the efficient storage, organisation, retrieval, and monetisation of assets.

Digital Asset Management

In a move to represent and utilise assets in the financial market better, security tokens were introduced. These are tokenised representation of legal ownership over physical and digital assets. Equipped with revolutionary features, they make it easier and more convenient to invest and grow wealth.

How Security Tokens Can Revolutionise Asset Tradings

Security tokens demonstrate key properties on the blockchain technology. They are a regulated, fast, secure, and profitable means of managing real-life and digital assets, such as real estate and company shares. Here are some of the reasons why investors are pumped by the innovation that are security tokens:

  • Round the Clock Accessibility

Traditional stock markets typically follow regular working hours: open Mondays through Fridays and closed during weekends. Security tokens do not. They enable 24/7access for asset exchange. This allows investors to go beyond the limits of time zones and improve the flexibility of their businesses.

  • Free Market

Security tokens are available to anyone with internet access. This means that foreign investors can deal with local investors and vice versa, and small-scale investors can take part in stock markets. With security tokens, a British investor can invest in an Asian or European jurisdiction without hassles.

  • Enhanced Liquidity

Under normal circumstances, investments take a significant amount of money. Most of the time, only top companies and established entrepreneurs can afford to pay the price. Security tokens can pave the way to fractional ownership, a structure where investors own a percentage of an asset. In this setup, the minimum requirement to invest is lowered.

Many secondary markets, which are spaces where investors can buy and sell assets they already own, now exist for tokenised assets. These allow individuals to take part in the investment process.

  • Improved Security

Security tokens only involve two parties: the issuer and the issuance platform. This eliminates the need for bankers, clearing firms, registrars, transfer agents, and other mediators during transactions. It also reduces the risk of fraud and manipulation.

The security token, one of the newest innovations that digital asset management has to offer, strives to keep up with real-time changes and to provide more value to financially focused individuals. There is more to unravel and learn, but one thing is sure—security tokens are an exciting development that businesses and investors should look into.

What Does 2020 Have in Store for Security Tokens?

Matt Dibb, CEO of leading cryptocurrency research and asset management companies Astronaut and Picolo Research, shared his “outrageous predictions” for security tokens this year. He predicts that 2020 will be the year of tokenization. This will ignite the transformation of traditional assets to tokens, which will boost of traditional finance.

According to the crypto expert, security token integration will increase in 2020, specifically in the tech market. Dibb predicts the birth of secondary markets involving Apple, Airbnb, SpaceX, and other tech-focused businesses for security tokens.

Based on these predictions,  the ecosystem surrounding security tokens and their role in finance is developing and growing fast.

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