What is securitisation?
Securitisation is the process whereby an illiquid asset is transformed into a security. As a security, it is now a fungible product that holds some monetary value, and it can be sold to investors.
Securities are created by an issuer and they represent a share of some assets, which an investor can purchase for a specified rate of return. This creates liquidity in assets by opening them up to investors - when they would have previously been unavailable for purchase.
Blockchain brings a wide range of benefits to the securitisation process - for both financial and security reasons. Blockchain technology streamlines the securitisation process to bring maximum efficiency, helps to keep costs low and transparency high, and provides regulation and security that offers peace-of-mind to investors.
WHAT TO EXPECT
The new securitisation lifecycle
The enhanced safety and lower costs associated with securisation on the blockchain encourages interest from more investors, because previously high-risk securities now have more transparency around them. It’s expected that this will cause trading volume to rise and costs to improve, with investors able to make sounder decisions without the worry of fraud.
The key benefits of STO
Blockchain, cryptocurrencies and regulations add credibility to STO that ICO couldn’t offer.
The infrastructure and intermediaries in traditional securities made them slow and expensive.
Security tokens can be programmed and are enforced by smart contracts.
Security tokens are open to anyone on the internet, regardless of their location.
An open market with fewer intermediaries reduces the chance of manipulation.
STO investors are given a convenient way to liquidate their assets on specialised token exchanges.
We’re here to break down the technical terms to give issuers and investors a greater insight into the process. If you have any other questions, just get in touch.
In its most simplistic sense, there are two major steps in the securitisation process:
- Step 1: A company with assets (the originator) pools any assets it wants to remove from its balance sheet into a reference portfolio. Assets are then sold to an issuer.
- Step 2: The issuer turns these assets into tradeable security tokens that are sold to capital market investors.
SECURITY TOKENS VS TOKENISED SECURITIES
Security tokens - newly issued securities that operated on a distributed ledger.
Tokenised securities - a representation of a financial product that already exists.
The entire security token suite of services
We prepare your organisation to raise capital via STO.
Our team of blockchain experts provides the skills & technology needed for a successful launch.
We ensure your STO complies with regulations and all legal documents are in place.
Access our growing ecosystem of investors and brokers to open your security tokens to an expansive network.
24/7 support for you before, during and after STO issuance.
Preparation of whitepapers and an innovative marketing strategy to accelerate your success.
Advice and support from blockchain consultants who specialise in capital raising via tokenisation.
A user-friendly platform where businesses can manage and distribute tokens.