Security Token Offerings (STOs) are continuing to gain ground. The framework conditions for digital securities are set — in 2021, the new way of investing can expect a significant upswing.
Security Token Offerings (STO) are the future — this realisation has now spread outside the crypto sector. The benefits of digitally securitising and issuing tokenised securities are too great for issuers and investors. Not only less paper, but also fewer intermediaries and lower fees are among the advantages of Security Tokens over traditional securities.
STO vs ICO: What’s the difference?
STOs are often described as the serious version of Initial Coin Offerings (ICO). And for good reason: in Germany, Security Token Offerings are subject to BaFin supervision. In order to conduct a public STO, a securities prospectus must be prepared for the Security Token. For issuers, this means legal certainty, while investors benefit from the investor protection they are familiar with from the traditional securities market. By creating a regulatory framework — including in the form of the new crypto custody regulation that came into force in January — the stage is set for further innovative STOs in 2021.
Security Token Offerings 2020: Lots of untapped potential
Admittedly, this does not mean that there have been no successful forays in 2020. As recently, Hamburg-based neobank Tomorrow raised its target amount of €3,000,000 in a very short time. In the process, 2,000 investors acquired profit participation rights in token form — a typical use case for the digital securities. Apart from that, tokenisation in Germany 2020 has gained momentum especially in the real estate sector. Several properties were already fully financed via Security Tokens in 2020.
The fact that tokenised “concrete gold” in particular found favor with STO investors in the crisis year 2020 should surprise few. Meanwhile, positive developments in Corona vaccines are laying the groundwork for tokenisation to be increasingly used for other purposes in 2021, most notably corporate financing.
Where can Security Tokens be purchased?
There are some pitfalls to watch out for when looking for Security Tokens. Quite a few providers try to profit from the reputable image of the STO. In other words, not everything that says STO is actually a real Security Token. On websites offering STO calendars, for example, one all too often encounters simply mislabeled, unregulated ICOs.
By contrast, it is much safer to register directly with a regulated platform. The risk of falling for an ICO in STO fur is thus zero. One of the best-known STO platforms in Germany is area2invest, which is operated by Liechtenstein-based 21.finance AG. A Security Token Offering is currently running on area2invest, which is tailor-made for the global trade that will regain strength in 2021: The Green Ship Token of the Hamburg shipping company H. Vogemann serves as an investment in sustainable cargo ships — and is thus future-proof in two senses.
Register now with area2invest
For Swiss investors, area2invest offers the Finka Token, another highly innovative investment vehicle. The Finka Token is a Security Token that enables revenue sharing in the Bolivian cattle farm La Pradera. “The Finka Security Token paves the way for a new uncorrelated asset class. We are intrigued by the possibilities offered by blockchain technology,” comments Carlos Fernandez Mazzi, founder and CEO of Finka GmbH, on the recent collaboration with area2invest.
With the Green Ship Token and the Finka Token, area2invest already offers access to the innovative world of STO, which is expected to become much more colorful in 2021. If you don’t want to miss out on tomorrow’s trend and are looking for a reputable provider of high-yield security tokens, then you are in good hands with area2invest.
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