8 Decimal Capital, a global blockchain-based investment firm based in San Francisco, just released their three-part comprehensive overview of the security token industry. In this report, the firm documents the significant changes security tokens would bring to the world.
8 Decimal Capital understands that security tokens are the future of our financialized world, which is why the investment firm decided to release today their three-part report on the blockchain-based security industry.
The report outlines two major ‘stages’ for the security token (ST) industry. ‘ST 1.0’ will be the first generation of regulated token products, This first stage will involve orienting the token industry in their newly-established legal status. ‘ST 2.0’ is when the real disruption begins: the second generation of security tokens “are the ones that simplify the process used to verify assets and investors.” This generation will be the one to achieve mass-use.
To sum up the report, it is the opinion of 8 Decimal Capital that the security token industry will bring about these major changes:
- Programmable and Automated Compliance: regulatory approval and permissions will be made faster and achieve instant clearing.
- Fractional Ownership: making ownership more accessible, the entry point for high-risk products will be lower.
- Increased Liquidity and Market Depth: the ease of transferring and trading tokenized securities will allow for a more liquid market and bring this liquidity to historically slower, more illiquid markets, like real estate.
- Asset Interoperability: A standardized regulatory agreement between different digital assets and blockchains will facilitate their cross-usage unlike ever before.
Given that the current global value of equity assets currently totals some $70 trillion, debt at $100 trillion, and the real estate market totaling $230 trillion, there is room for the security token space to be a multi-trillion dollar industry. 8 Decimal Capital’s report underscores how much is at stake with this new financial sector.
According to their report, we are rapidly approaching the ‘ST 1.0’ generation of the security token industry. STOs are already beginning to be rolled out slowly in Europe and we can expect some legal closure for the space by next year.
About 8 Decimal Capital
8 Decimal Capital has some $60 million in assets under management with an investment team consisting of 10+ venture capital veterans. They have offices based in San Francisco, Beijing, and Hong Kong.
What do you think about 8 Decimal Capital’s findings? How soon can we expect to see these major changes to our financial system? Leave your thoughts in the comments below.
Image courtesy of 8 Decimal Capital.