STO Guides: Top 5 STO guides of 2019

This article will provide you with insights into the STO guides and explain to you how it could revolutionize the crypto-sphere.

Security token offerings are referred to as financial securities that are backed by revenues of the company, tangible assets or profits.

Unlike ICOs, STOs offer legal rights such as voting or revenue distribution. Security token’s role is similar to that of conventional security, except that security tokens confirm ownership via blockchain transactions and build fractional ownership possible.

Since security tokens are subjected to federal laws, it protects investors on certain levels without involving the third party and governs securities as well.

This article will provide you with insights into the STO guides and explain to you how it could revolutionize the crypto-sphere.

What is Security Token Offering?

The type of token, which is tied to securities and represents tokenized assets of the firm is referred to as a security token. From real estate to bonds, it implies anything that can be tokenized without worrying going against the law.

While STOs are gaining more traction, many crypto investors would be discovering a lot of opportunities with minimum risks. An STO will introduce investors to the newest crypto investment option.

Similarly, security tokens are traditional financial instruments, which are considered as an investment contract by the community. If an investor desires to gain profit from the token through dividends and revenues, then it is considered as security.

How does it work as a currency?

To become a shareholder, they can visit online to purchase a share and get a PDF receipt as a proof of ownership that enables people to trade in the market.

STO functions almost in an identical way, except that when an organization issues their shares, they issue it as a token. It means that shareholders can buy the tokens that represent shares and then trade them.

Why are Security Tokens Important?

The assets that are represented by security tokens already exist in the “real world” and act like a bridge between finance and blockchain world.

Let’s undersatnd what changes that Security Tokens can bring.

1. Improving Traditional Finance: The transactions related to traditional finance are a little expensive due to all the fees associated with the middleman such as bankers. Security tokens eliminate the need of middleman that reduces fees.
2. Functionality: With smart contracts, issuers can use the security tokens as a payment method on the platform. Also, it can be used to access voting rights, network gateway and loyalty programs.
3. Speeding up Execution: Financial institutes include a lot of intermediaries that increase the execution time. By eliminating the middleman, securities enable faster execution time for the successful issuance of security tokens. Due to the increased speed, the security tokens look like an attractive investment.
4. Easier liquidation: Licensed security token trading platform offers easy secondary trading on security tokens. Also, it enables investors to liquidate security tokens easily.

Accredited Investors can invest only in private Security Offerings. Also, they should meet one of the following needs:

1. The annual income should be more than $200,000 individually, or with a spouse, it should be $300,000. The income should be maintained from the last two years along with the same expectation for the current year.
2. Investor’s net assets should be worth $1 million or more (excluded primary residence).
3. An investor has the institution with more than $5 million in assets like trust or venture fund.

Future of STO

It is expected that 2019 could be the year of STO; therefore, here are a few things that need to look forward to:

1. Due to security tokens, Governments and banks are interested in implementing the Blockchain in their in-house operations.
2. During 2019, Security Token market can exhibit a logarithmic rate of growth. Also, it is believed that billions of dollars can flow from Wall Street and Silicon Valley into security tokens. The shift from ICOs to STOs is possible because, with legal compliance, more investors are interested in joining and planning to invest in security tokens on the basis of business models.

Four Security Token-Friendly Countries In The World

Legal questions are still a concern for security token traders and issuers globally. But, a few countries have opted blockchain technology due to their legislative efforts.

Also, they understand the positive impact of the security tokens on the financial market.

Switzerland

Since 2017, the Swizz City, ZUG is also known as the crypto valley, has been the hub for the expert blockchain developers. Among the leading nations of the world, Swiss regulatory authorities were the first ones to clarify how ICOs and STOs work from a legal perspective.

In the next coming years, “Switzerland” can become the hub for the tokenized security space as it already provides proven track record having established cryptocurrency projects.

Malta

Malta has been one of the best countries in the world that has the most hospitable legal environment for security token industry. The country has already issued many STOs and holds token offerings with Maltese exchanges like LXDX planning to launch their STO, compliantly.

As per the certain jurisdictions, navigating the regulations of the STO may seem like a minefield. But, MFSA (Malta’s Financial Services Authority) offers token issuers and crypto fund managers the advantageous STO regulation that expedites the Collective Investment Schemes (CIS) licensing process for crypto funds.

Estonia

Estonia is another country that has launched its own STO platform. On Nov 12, 2018, Estonia Financial Intelligence Unit (FIU) B2BX provided the approval for a regulatory license to B2BX cryptocurrency exchange.

Using the license, the B2Bx can compliantly offer the trading of cryptocurrencies in Estonia that includes crypto-to-crypto trades and crypto-to-fiat pairings in the future.

Canada

Canada launched a stable legal system and the license prospects for exchanges that deal with tokenized securities. Similarly to the US, the compliance costs in Canada are high and it also has strict regulations when it comes to securities. Therefore, it seems that STOs might come under the exemption clause of current regulations in place for crowdfunding.

Top 5 STO guides of 2019

1. LeewayHertz

LeewayHertz has given the complete guide on How to launch STO. They have covered end-to-end STO launching process as follows:

• What is an STO?
• Different types of Security Tokens
• Post and Pre STO
• List of the countries and their regulations to be followed to launch a security token.
• Different security issuance platform
• Howey Test

2. Blockgeeks

Blockgeeks has presented a comprehensive guide on how to launch an STO. In their guide, they included:

• What are Security Tokens?
• What are Tokens?
• What Are ICOs?
• How Does a Token Gain Value?

3. Coinspeaker

Coinsspeaker offers readers a complete overview of the STO. In their STO guide, they concluded:

• Utility Tokens, Security Token. What’s All That About?
• Is STO the New ICO?
• Is it Security or the Utility Token- XRP Case
• Potential and Advantages of STOs

4. STOScope

STOScope offers the complete guide to Security token offerings. Following are a few points that they have covered in their manual:

• An overview of security tokens
• What is an STO
• STO use cases that go beyond the hype
• What the future holds for STOs

5. Guerrilla Buzz

Guerrilla Buzz is taking the STO marketing to the next level by creating valuable content to attract the audience. Following are the points that are covered in their How to launch STO guide:

• Launching your STO
• A Brief Recap on STOs
• The Legal Side of STOs
• Setting up your STO

Final Thoughts

Security tokens can entirely transform the equity market as the bitcoin changed currency. Since security tokens offer investors to liquid economic interests, it can expedite the delivery process. Nowadays, any form of asset ownership can be tokenized; thus it is expected that the current market can be worth more than multi-trillion USD in the forthcoming years.

Are you interested to find out more about STO? Visit LeewayHertz Insights to read the most insightful articles on the tokens, blockchain, AI, IoT and more. Also, you can follow LeewayHertz on Twitter and Facebook to get the latest updates on technologies.