For Investors How tokenised securities are unlocking revolutionary opportunities for global investors.

The team behind Tribe Digital Ventures has a deep understanding of blockchain and tokenized securities. If you have any other questions not listed below, just get in touch.

To break down this question, it’s easier to start with the definition of a security. A security is a fungible asset that holds some monetary value, such as ownership in a company’s stock. Security tokenisation is the process in which ownership of a security is materialised, in the issuance of a digital token. These security tokens are then issued and traded on the blockchain.

The key properties of blockchain bring a much-needed change to the traditional world of investing: transparency, privacy and security. Due to blockchain’s decentralised efficiency, there’s no need for a middleman, removing the possibility of tampering at some point in the process. This decentralisation and cryptographic algorithms that run blockchain make it immune to access from unauthorised parties.

Digital tokens, or security tokens, have to pass the “Howey Test” to be deemed secure. STOs are subject to strict regulations, ensuring that investors are fully protected. Your property rights will be recorded in a smart contract that is immune to fraud.

Smart contracts are computer protocols that record transactions without the need for middlemen. They automatically enforce the agreement, so that both parties can be confident it will go ahead as planned. Smart contracts are encoded on the blockchain and encrypted on a shared ledger, so cannot be hacked.

STOs have overtaken ICOs as the innovative way to raise money, thanks to the regulations they add to the space that were never there before. Thanks to advances in technology, the STO infrastructure is in place to offer a faster, more transparent and more secure way of raising money, which is opening up opportunities to businesses and new investors.