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Graeme Moore, the VP of marketing for Polymath, recently discussed the current status of security tokens. He emphasized that despite the heavy regulation in financial securities, the tokenization of securities can actually contribute to the enforcement of restrictions and regulations.
Polymath, a platform which received $58.7 million during its January 2018 ICO, ultimately aims to make the often complicated and legally constricted procedures of creating and selling security tokens much easier.
They have developed their own standard token, the ST20, which is not only open-source but has KYC (know your customer) criteria built-in. The ST20 is different from the standard ERC-20 insofar as the ST20 can only be held by a list of authorized investors who have previously undergone KYC and AML (anti-money laundering) screening.
Moore’s recent remarks emphasized the legislative obstacles that the security token community knows too well. Yet he added that there are legitimate ways in which Polymath’s ST20 can overcome such barriers that are simply absent with traditional financial securities:
[su_quote]Current risks [for security tokens] would be on the regulatory side of things. If a government declares security tokens outlawed, this would be a major blow to the movement. However, we see security tokens as helping regulators, because you can actually code regulations and transfer restrictions into the tokens themselves. Today, with a paper share certificate, regulations are only followed because a human says, ‘Hey you can’t make that trade’, or ‘Hey, you can’t sell now, or to that person’. What we are proposing is a world where regulations are maintained by the technology, so that things that are not supposed to happen cannot happen.[/su_quote]
Moore also spoke about the future of Polymath, which plans to have future involvement in exchanges. Polymath is partnered with Open Finance Network, who is on the cusp of actively trading security tokens. Their platform has already accepted applications for security token listings, where the use of an ST20 brings greater chances of approval.
But despite such progress, there is no denying that successful STOs remain extremely difficult to execute. When asked about advice Moore would give to projects considering an STO, he responded by saying,
[su_quote]Engage legal counsel early. Selling securities is no small feat, and it is important to get good legal advice. Come to the Polymath Platform, where you can receive warm introductions to top-notch legal firms that are familiar with the securities and blockchain spaces.[/su_quote]
Ultimately, it was clear that Moore remains decisively positive when looking to the future.
[su_quote]Security Tokens will become the default method used for financial securities. Paper share certificates will disappear first. Then public stock markets will start to see volume being eaten away by security token exchanges. In 5 years there will be $10 trillion of security tokens, and it will be considered incredibly strange and antiquated to ever give an investor a piece of paper to represent ownership.[/su_quote]
Is Moore’s assessment of the future of security tokens correct? Will Polymath solidify themselves as a security tokens innovator who will assist in actualizing such a vision? We’d love to hear what you think below.
Image courtesy of Polymath.