Harbor’s highly anticipated securities tokenization platform has officially launched. As an institutional-grade end-to-end service, the new platform was designed to bring institutional investors into the security token industry. With the platform already tokenizing a $20 million REIT, it appears to be well on its way in living up to such expectations.
Harbor’s end-to-end platform was built for institutional-grade functionality. Three main components were prioritized, in an effort to distinguish Harbor from any competition: security, compliance, and ease-of-use. The result, says the Harbor team, will be an increase of institutional investors entering the security token industry.
Harbor hasn’t wasted any time in accomplishing their mission— they’ve already tokenized the first US REIT through a $20 million offering which involves luxury property.
How Harbor Tokenizes Securities in a Secure and Compliant Manner
Harbor’s platform provides a means for users to tokenize securities, thereby creating a digital representation of a real-world asset in the form of a security token. The blockchain allows for an immutable record of ownership concerning such assets. But with Harbor’s R-Token, many additional benefits become available.
Harbor streamlines investor onboarding by removing middlemen in processes such as Know Your Customer (KYC) and Anti-Money Laundering (AML) screening, document signing, accreditation verification, tax compliance, and funding.
Harbor’s end-to-end service for tokenizing private securities
The compliance protocol, which is one aspect of Harbor’s unique ‘security token stack’, algorithmically enforces the applicable securities regulations for the life-cycle of the token. This means not just through initial issuance, but throughout secondary market trading as well.
The Benefits of Tokenizing Private Securities Explained
The team behind Harbor has specifically focused on the tokenization of private securities involving commercial real estate and investment funds. Typically, these areas have very little liquidity, with a low volume of secondary market trading due to complex regulatory requirements.
However, Harbor’s technology enforces the clear securities requirements established by the SEC and other regulatory bodies. With such automation, investors are freed from previous restrictions which lock them in a state of illiquidity. In this sense, automated, transparent, and algorithmically enforced compliance drastically increases the liquidity of a traditionally illiquid asset class.
With security tokens, investors can buy and sell tokens globally with 24/7/365 exchanges— a capability which the capital markets industry is just now seeing for the very first time. All of this is done in a compliant manner with almost instantaneous settlement cycles and no counterparty risk. For more on such benefits, be sure to review our comprehensive security token guide.
Details of Harbor Tokenizing the First US REIT
On November 27th 2018, Harbor CEO Josh Stein announced the United States’ first tokenization of a REIT, with Convexity Properties. The REIT represents $20 million of private equity in a luxury student residence called ‘The Hub at Columbia’ at the University of South Carolina.
The Hub at Columbia
A total of 955 shares will be tokenized in a ratio of one share per token, with each token priced at $21,000. Convexity Properties has said that the tokens will be entitled to a 5% dividend.
Precisely where the security token industry will strike next is unknown. What is known however— especially after the recent groundbreaking developments from Harbor— is that the security token industry is here to stay.
What do you think about the launch of Harbor’s tokenization platform? Which real-world assets will be next to experience the benefits of tokenization? Let us know what you think in the comments below.
Meet Tim. Tim is a co-founder of The Tokenist. Originally from Kalamazoo, Michigan, Tim is a mechanical engineer by training and has been investing his whole life. He started his career with GE in engineering and operations management where he held various leadership roles before leaving to pursue an MBA (he is a proud former co-chair of the Milton Friedman Group at Chicago Booth). After business school, Tim spent several years with Baird Capital where he made private equity investments in consumer and industrial companies. He left Baird to found Protective Technologies Capital in 2018, where he continues to make private equity investments in family businesses looking for help with succession planning. Tim lives in Chicago, where he enjoys watching Michigan football and basketball and traveling with his wife Kristen. Like Sia, he also likes telling jokes. However, his wife adamantly insists that he not share his “dad jokes” publicly so he reluctantly sticks to writing about finance and technology.