Experts from across the security token industry came together in Santa Monica, California earlier this month for a lively discussion on what blockchain technology brings to the real estate and financial markets at large.
Given that the security token space is still in its early days, every meeting of great minds within the space should be listened to with curiosity. The exchange of ideas is crucial to a healthy, growing tokenized security marketplace. Earlier this month, a meet-up on security tokens in Santa Monica, California was held: The panel discussion provides us with some key insights into where the space is headed and how it has the potential to radically alter the real estate market as we know it today.
- Andrew Jewett – Founder of Aperture Real Estate & Property Coin
- Henry Elder – Head of Asset Tokenization, Digital Asset Advisors
- Marc Boiron – Blockchain & Securities Attorney, FisherBroyles, LLP
Moderated by Kelvin Dickerson, Founder of TokenizeLA.
Security Tokens Will Forever Change Financial Markets
The main focus of the panel was discussing how tokenized securities could turn the entire financial market as we know it on its head. Henry summed this up with the help of a poignant analogy:
I think one of the best analogies I’ve heard to describe a STO is it’s like you’re going shopping at the supermarket and instead of taking your asset which would be your groceries here and putting in a plastic bag which would be a traditional paper security your tokenizing it which is like a reusable bag. You’re not changing the nature of the groceries the asset itself all you’re doing is putting into a different better bag.
As Marc also pointed out, “anything can be tokenized. The real question is what should be tokenized.” That’s why it’s crucial that we bring “high quality deals to the market” to entice investors. Andrew agreed, but firmly stood by his opinion that “institutional interest in this space is really going to start to kick in around 2019.”
Pressing Legal Concerns
Although all three panelists were excited about tokenized securities, and what they would eventually bring to real estate, there were some pressing legal concerns.
Andrew, for one, made the point that “you can’t Uber your way through the SEC.” Instead, security token issuers need to realize that they need a lawyer and projects are spending too much money figuring out legal concerns themselves nowadays. Henry added, “you the issuer are liable if your lawyer does something wrong.” It’s thus crucial then that security token issuers are positive they have a trusted legal team.
Luckily, the process of issuing a security token is only becoming more streamlined, as more and more speciality firms begin to offer legal consulting for this emerging industry. Future lawmakers are also coming around to the idea that cryptocurrencies are here to stay.
However, security token issuers have to be keen on not rushing their projects through.
“If everything goes perfectly the fastest you can get this (tokenization) done is like two months and it will not go perfectly at all. It is more likely that you are talking about 4 to 6 months and especially right now going 8 months is not surprising because the market is changing all the time,” Marc said.
The three panelists thus stressed the pressing legal questions as being the prime concern for security token issuers today, and that it would remain that way for some time. Although expectations were tempered, there seemed to be relative confidence that 2019 would be a monumental year for the security token industry.
Watch the full hour-long panel discussion for more details.
What do you think of the panel discussion? Do you agree with the points mentioned? Let us know your thoughts in the comments below.
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