As of January 3rd 2019, real-world shares representing ownership in Apple, Facebook, and Tesla are set to become tokenized and available to investors next week. With 2018 bearing one of the ugliest years for cryptocurrencies to date, the security token industry witnessed significant progress, leaving many to anticipate 2019 as the year of implementation.
Details of Apple, Facebook and Tesla Stock Becoming Tokenized Explained
The security token industry has kicked off 2019 with a bang, after the DX.Exchange— which is set to open next week— has announced the listing of shares from corporate giants such as Apple Inc., Facebook Inc., and Tesla Inc.
With the new listings, individuals will be able to purchase security tokens which serve as a digital representation of real-world stocks. Each security token will be backed by one regular share. Token holders will be entitled to the same cash dividends as traditional shareholders who purchased their securities from platforms such as the New York Stock Exchange (NYSE).
According to the recent announcement, the companies themselves (Apple, Facebook, and Tesla) will not be directly involved. Instead, DX.Exchange is partnering with MPS MarketPlace Securities Ltd., who is set to purchase and hold the shares which will then become tokenized on Ethereum according to the demand seen through DX.Exchange.
The team behind the Estonian-based DX.Exchange claims the listings are fully compliant thanks to the company’s license to operate from the Estonian Financial Intelligence Unit (EFIU). The license, they say, comes with full authorization to operate in the European Union (EU).
Further, MPS MarketPlace is licensed by Cyrpus’s financial regulator, and will hold the stocks on behalf of token holders in a segregated account. According to DX.Exchange CEO Daniel Skowronski, the offering will comply with MiFID II, the foundation of the EU’s securities regulations.
Skowronski went on to explain how the highly anticipated future of security tokens was a primary factor behind the new listings:
“We saw a huge market opportunity in tokenizing existing securities. We believe that this is the beginning of the traditional market’s merge with blockchain technology. This is going to open a whole new world of trading securities old and new alike.”
How 2019 is Predicted to be the Year of Implementation for Security Tokens
Skowronski is one of many who see the significant potential in transitioning the traditional securities sector to Distributed Ledger Technology (DLT).
Already in 2018, security tokens experienced a notable degree of implementation. Equity, investment funds, REITs, real estate, and even fine art ownership have all experienced the benefits of tokenization: Exchanges operate 24/7/365 and require a mere internet connection, which drastically increases the pool of available investors from a company’s perspective. Likewise, this opens to the door to many investments which were previously out of reach due to geographical constrictions from an investor’s point of view.
In addition, fractional ownership decreases barriers to investor access. For example, the need to find one investor with $5 million can be circumvented through the issuance of 100 security tokens, where each token represents $50,000. As outlined by Harbor CEO Josh Stein, the latter is a much more feasible alternative which simply doesn’t exist in traditional finance. For more on the advantages of security tokens, be sure to review our comprehensive security token guide.
Security token trading platforms have also made significant progress. OpenFinance Network— the first US-regulated security token trading platform— reached full functionality in December 2018. tZERO, a platform of the same type, is scheduled to attain a similar status in the first quarter of 2019.
While 2018 could be considered a year of preparation, many believe 2019 will be the year of implementation for the security token industry. With tokenized shares from Apple, Facebook, and Tesla, such forecasts seem to be right on target.
What do you think of the tokenization of shares from corporate giants such as Apple, Facebook, and Tesla? Will this lead to increased security token interest and bridge the gap between large corporations and the tokenization of securities? We want to know what you think in the comments below.
Images courtesy of Apple, Facebook, and Tesla.