Digital securities (security token) Market overview｜Overstock・Republic・Polymath・TASE
Q：Has the digital securities (security token) market benefited from the rise in stock prices of NASDAQ-listed company “Overstock”?
A：Certainly, the stock price increase rate of “Overstock” is reported to be 2,354% compared with March, and since it exceeded $100 yesterday, further increase rate is expected.
At present, it can be said that the only company that has the potential to grow its performance is issuing digital securities (security tokens).
However, few would have expected this miraculous rise in stock prices in March of this year.
The impact of monetary easing and the spread of the new coronavirus infection led to a rise in stock prices, and the case of “Overstock” increased interest in the digital securities (security token) market and became a catalyst for attracting more investors.
So far, “Overstock” and its subsidiary “tZERO” are leading the market.
Recently, more and more companies are reportedly interested in providing digital assets, blockchain financial infrastructure and services.
The increase in market participants will enable the medium- to long-term development of the digital securities (security token) market.
In the United States, the NASDAQ composite index and gold futures have reached record highs in the background of the fact that the quantitative monetary easing policy is maintained even in the situation where there is no prospect of economic recovery.
In addition, a large amount of money has flown into the Gold Listed Investment Trust (ETF), and the S&P 500 has a 40% listing rate when comparing the indices from March of this year to the present.
And a lot of money is invested in the digital asset market such as Bitcoin.
The market capitalization of the digital securities (security token) market was $121 million on June 29, but it exceeded $500 million on August 6, and rapid market expansion is in progress.
reference: https://stomarket.com/ (15:00 on August 8, Japan time)
Overstock.com Inc, which operates an e-commerce retail business in the United States, is growing its performance due to the impact of the new coronavirus.
The stock has been trading around $100 since the low of $3.99 in March this year, and has more than doubled over the past month.
The digital securities (security token) “OSTKO” issued by “Overstock.com Inc” is also about 10 times the price from the lowest price, and it is contributing to the development of the market together with its subsidiary, tZERO.
※ Digital security (security token) “OSTKO” is a blockchain-based “Digital voting series A-1 preferred stock”.
In the stock market, Overstock.com Inc is reported as a company that has recorded a stock price increase rate of more than 1,000% along with companies such as Wayfair and Novavax.
At present, it is considered that the digital securities (security token) market is expanding due to the favorable performance of “Overstock.com Inc”.
It should be noted that while one company’s rapid growth has boosted the market capitalization of the entire market, the trading volume of other stocks remains weak.
However, it can be said that “Overstock.com Inc” is very important in the history of the digital securities (security token) market.
“Overstock.com Inc” has undergone rapid development, and it issued digital securities (security tokens) in-house as well as platform operation by its subsidiary tZERO.
It is unclear if a similar case will be done by a NASDAQ-listed company with a promising business model, such as “Overstock.com Inc” issued a digital security (security token) “OSTKO”.
However, as funds continue to flow into the digital asset market, Goldman Sachs, a global investment bank, has shown great interest in blockchain-based financial systems and digital assets, and is considering issuing its own token.
It is thought that the real development of the digital securities (security token) market is due to the entry of major companies, and issuance of tokens (digitalization of securities) is expected.
This week, there is a report about the increase in the number of regular and supporting members of the Japan STO Association in Japan.
Let’s consider the future of digital securities (security tokens) based on the latest trends in overseas STOs.
“Republic” successfully raised $16 million in funding (STO)
The crowdfunding platform “Republic” issued a digital security (security token) “Republic Note” secured by its revenue sharing rights, and successfully raised $16 million.
Reg D (certified investor): $11 million
Reg A+ (non-certified investor): $5 million
It was revealed that the STO by “Republic” was conducted in compliance with Regulation D and A+, and more than 10,000 people had announced their participation.
Crowdfunding has spread in Japan over the past 10 years, and the stock price of Makuake, which was listed on the Tokyo Stock Exchange Mothers last December, rose from 3,630 yen at the time of listing to 8,830 yen (as of August 6).
It is highly evaluated by many investors. “Republic” has built an attractive business model by operating a crowdfunding platform in the US capital market, and it is expected that companies that are expected to grow in the US market will continue to implement STO.
Although the listing on the secondary market has not been revealed so far, “Republic” has a large presence in the digital securities (security token) market.
Polymath “Token Studio 2.0”
The digital security (security token) issuing platform “Polymath” has updated the version of “Token Studio” to improve the convenience of the token issuing and management process.
“Polymath” also provides the “Polymath Service Provider Marketplace”, which aims to efficiently collaborate with businesses that provide KYC/AML, legal support, broker-dealers, custody, advisory services, etc.
“Token Studio 2.0” is being developed to utilize the block chain “Polymesh”, which is handled by “Polymath”, which is working to build a digital securities (security token) ecosystem.
・Setting and implementing strict compliance requirements
・ Guaranteed to comply with laws and regulations regardless of jurisdiction
・Proper management of investors by confirming KYC
“Token Studio 2.0” supports the design of digital securities (security tokens) that meet the needs of clients.
“Polymath” is working on the transition from Ethereum to Polymesh, and “Archax”, which aims to open a digital securities (security token) exchange in the UK, has announced support for Polymesh tokens.
It is believed that the use of Polymesh by more and more STO companies will lead to the expansion of the ecosystem, and in the future, the issue of digital securities (security tokens) using “Polymath” will be of interest.
Tel Aviv Stock Exchange (TASE) Blockchain Securities Lending Platform
Companies in each country are working on digitalization of the financial system, and in Israel, the Tel Aviv Stock Exchange (TASE) is planning to establish a securities lending platform utilizing blockchain.
It is said that the blockchain will bring about the efficiency of securities transactions and high-level, low-cost security, and TASE is advancing activities that are rare in the world, such as direct loan transactions of financial products between investors by P2P.
“TASE is proud to present this first-of-a-kind lending pool, a safe, cutting-edge and state of the art platform.The Blockchain technology will present a new level of safety for securities lending and will support growth for transactions based. TASE is a global financial innovation leader, and strategically pursues the technological advancement of the capital market.” said Orly Grinfeld, Head of EVP and Clearing at TASE.
How will a stock exchange’s efforts to open a blockchain platform affect the development of a country’s capital markets?
Expectations are high for the opening of the blockchain securities lending platform on November 2nd in Israel.
It was found that not only the service development of each STO company but also crowdfunding companies and stock exchanges are participating in the market.
・Tokeny Solutions (Luxembourg): To provide services related to “Data Integrity and Price Discovery for Private Securities” in collaboration with the US Fintech SaaS company “Invenium Capital Partners”.
・Wecan Tokenize (Switzerland): Successfully procured Portuguese real estate using digital tokens in collaboration with Geneva Management Group.
・Max Property Group (Netherlands): Obtained approval of a blockchain-based real estate crowdfunding platform from the Dutch Financial Market Authority (AFM).
The entry into the real estate market is also active in European countries, and the base of the digital securities (security token) primary market is expanding.
Activation of not only the secondary market but also the primary market of each country is indispensable for the development of digital securities (security tokens), and the formation of a capital market corresponding to the blockchain will proceed.