[News release period: February 11 – February 17, 2019]
Security tokens which are essentially digital tokens that are backed by tradable assets have been steadily gaining more and more attention around the world. From the adoption of new regulatory frameworks by governments to the rise in interest in STOs (Security Token Offerings), here we present the latest news pertaining to tokenised securities from around the world to keep you up-to-date with the major events and news from the 2nd week of February 2019.
US SEC Targets Clearer Security Tokens Guidelines
The SEC is committed to ensuring that the ventures that comply with the regulatory framework do not get blocked. The SEC has expressed its interest in developing more agile regulations for security tokens as clarified in the Commissioner Hester Pierce’s recent speech.
In her speech, the Commissioner stated that not all tokens can be deemed securities and that when they are not being offered as investment contracts, they cannot be considered securities. She said that the tokens that are intended for a functioning network are not security tokens.
The Commissioner further said that it would be easier to “draw clearer lines” once the technology matures more.
While the SEC currently uses the Howey test to determine whether a token can be considered a security, it might adopt a more agile approach soon.
Luxembourg Announces New Securities Framework
The European nation has been widely recognised for its enthusiastic approach to blockchain technology. Luxembourg introduced a new bill on February 14, 2019, that talks about the regulatory framework for securities on the blockchain. The bill was passed by the Luxembourg parliament after 58 members voted in its support.
The bill will introduce legal certainty for using the blockchain to circulate securities and will ensure greater transparency. The bill aims to protect the interests of investors while also simplifying the transfer of securities. The bill will encourage the use of blockchain technology to strengthen the financial sector and will consider transactions facilitated with the technology equivalent to those implemented through the traditional means. The bill has been appreciated by the local blockchain community in Luxembourg.
Surging Investments In Security Tokens
Security tokens have been attracting the attention of major investors. Take SPiCE VC, for instance, a tokenised venture fund that invested in Archax, a London-based institutional security tokens exchange that will be launched in 2019.
Several Security Token Offerings (STOs) are lined up for release. Recently, TokenMarket announced their plans to conduct an STO on their own platform. In a similar way, Almond, an app and reward system for users to incentivise them to buy environmentally responsive brands has also announced their interest in conducting an STO, which will be the first of its kind in the UK.
Interesting times lie ahead for security tokens and Security Token Offerings (STOs) as governments across the world are recognising the importance of STOs post the ICO phase and developing the requisite regulatory frameworks to protect the interests of investors and consumers.
Furthermore, with the greater clarity surrounding tokenised securities, more and more companies and startups are launching their STO ventures.