Epicenter Bitcoin is a weekly podcast discussing the latest developments in the Bitcoin and cryptocurrency world. To kick off 2019, they brought on the president of CoinList, Andy Bromberg, to discuss tokenized securities and what token issuers can expect for the future.
CoinList is a platform that offers compliant token sales and fintech advisory services to the cryptocurrency space. The company raised some $9 million in funding during their Series A round during the summer of 2018 and incubated at venture firm AngelList. Now its president, Andy Bromberg, has come on the Epicenter Bitcoin podcast to discuss the future of tokenized securities what it will mean for issuers during 2019 and beyond.
Classifying Security Tokens
Throughout the course of the interview, Bromberg makes the case that Bitcoin-type systems will be dominant and that they are “decentralized enough” despite relying significantly on a group of core developers. This much, he says, is unavoidable. He dedicates a large chunk of his time, however, to discussing tokenized securities.
When it comes to security tokens, Bromberg said that the classification is frankly “too broad.” He says:
“Security token is a pretty silly classification. There are a ton of categories within securities that are totally dissimilar to each other. You would never talk about them in the same breath. In the real world, people don’t talk about investing in debt security and start-up equity as the same thing. They’re both securities, but totally different and very rarely would entities invest in both.”
Therefore, it’s “important to break down what are these assets.”
Bromberg puts tokens on a 2×2 axis. On one axis, is the regulatory status of the security: whether it is or isn’t a security. This roughly corresponds to utility or security tokens. Then, on the other axis is the “source of value for that token” which can be based on network-based value or real-world value.
Each of those four, Bromberg says, “tells a different stories about where the direction of tokens are heading.”
Therefore, the complexity of the security token space means that the term “tokenized securities” may be too broad of a term. However, given that the space is still in its early days, it might be convenient at this point to continue to group them together for the purposes of regulatory consistency.
Bromberg also seems to be of the opinion that 2019 will be a crucial year for the tokenized security space.
What do you think about Bromberg’s comments? Do you agree with his characterization of security tokens? Let us know in the comments below.
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