Vaibhav Kadikar, CEO of CloseCross, said:
“Increasingly, what we are seeing in the market is that jurisdictions are beginning to interpret STOs akin to IPOs and applying the same level of regulatory vigour. Despite the benefits of fractional ownership and digitised tokens, if this increased scrutiny becomes standard, the flexibility and retail investor scenarios will not last. Cross border investors are another impediment to STOs gaining traction, where each jurisdiction applies a different prospectus criteria, increasing costs tremendously. In summary, if the ICOs lose their sheen because they don’t provide profit participation and if STOs face an uphill battle, we may not see any significant uptake of these two vehicles going forward.”
Lone Fønss Schrøder, CEO of Concordium, the world’s first ID/KYC-ready business blockchain network, commented:
“STOs may be the way forward as alternatives to ICOs but they do not solve the issue of delivering a high-quality project to investors. Whether pitched as ICOs or STOs, new projects must deliver value creation for investors to get a return on investment.
Using STOs to tokenize existing assets adds a regulated framework to protect consumers but also bolsters liquidity, offers easy management of fractional ownership, and allows for faster settlement and immutable proof of ownership.
It is good news that the market seems to be moving towards regulation, and the emergence of STOs is a harbinger of this overall push. One would very much hope a renewed growth in STOs is predicated on projects and ideas of better quality than what we saw with many ICOs.
We believe blockchains will be required to deliver on-block KYC/AML capabilities –– a challenge for Bitcoin and Ethereum but which we see as an opportunity for Concordium and other new blockchains with integrated ID-verification.”
For more market trends, visit ETF Trends.