In light of the recently uptick in security token offerings, Nisa Amolis sits down with Vincent Molinaro, CEO Of Templum Markets, to discuss digital securities, technology, and the regulatory landscape.
The security token industry has been buzzing recently with a few high-profile announcements. Agenus Inc., for one, just recently announced their own security token offering, the first of its kind in the biotech world. tZERO, the largest STO to date, has also gone live with their much-anticipated platform. 2019 is getting off on the right foot.
In light of this news, Nisa Amolis conducted an interview with Vincent Molinari, CEO of Templum Markets, to discuss the future of the security token space. Templum Markets is a fintech company specializing in creating the infrastructure needed for the digital asset sector. The interview was recently published in the Forbes Contributors online column.
Confusion of Terms
From STOs to DTOs to security tokens, there seems to be far too many terms used to describe the digital securities space.
However, according to Molinari, the space is finally moving away from confusing acronyms. In fact, issuers are trying to stay away from the associations with ICOs completely. Molinari explains:
This trend is important for both prospective issuers and investors since the underlying properties of an ICO and a digitized, smart security offering could not be more different. As part of this process, the industry will look to move away from terms like “token”, “STOs” and “TAO” and towards terms like “smart securities” and “digitized” or “digital securities,” all of which are part of the broader “digital asset” industry.
The term “smart securities” has been catching traction as of late for being all-encompassing of the kind of work this new industry is trying to pursue.
Private or Public Blockchains?
However, debates over correct terminology is just the tip of the iceberg. The real debate has been over the role of public and private blockchains, and the future of the regulatory environment.
It is Molinari’s opinion that, while public blockchains are useful to increase efficiency and transparency, they are ill-suited for tokenized securities. “A move to a private, permissioned blockchain solution will separate smart securities from other solutions in the digital asset and cryptocurrency spaces,” he tells Amolis.
Because tokenized securities are in a new category altogether for the cryptocurrency space, it is understandable that they would require their own private blockchains. However, with this demand comes the need for new custody solutions. As Molinari elaborates:
“In our view, the anticipated high degree of tradability of digitized securities along with institutional demand for “good control” will drive the need to develop a custody solution for private, unregistered digitized securities that will be a key piece of the new market infrastructure being developed around these assets.”
In all, it’s Molinari’s estimate that 2019 must be the year that the security token space matures. And so far, there’s been significant promise.
Read the full interview with Vincent Molinari here.
What do you think of the ideas presented here? Do you agree with Molinari’s conclusions? Let us know in the comments below your thoughts.
Image courtesy of Templum.