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Institutional Adoption for the Tokenization & Security Token Industry

The world of security tokens has had its ups and downs, but it seems like things are looking up now. The realm of security tokens is getting the attention it needs from big institutions. With them putting money into the basics and keeping digital assets safe, we can look forward to a lot of growth. The future is looking bright for security tokens. Let’s take a trip down memory lane.

Back in 2017, security tokens were all the rage, with lots of platforms issuing them all over the world. But there was a problem: there were no safe places to trade these tokens and no one to properly take care of them. So, the excitement kind of died down for a while.

But guess what? In 2021, things started to change. Big, traditional banks and financial companies began putting money into making a solid foundation for security tokens. For example, Securitize got $48 million from investors like Morgan Stanley. DBS created a platform to make it easier to trade digital bonds. iSTOX, backed by the Singapore Exchange, raised $50 million. Even UOB is testing out digital bonds on a platform called Marketnode.

And these are just a few examples! The security token world is growing fast, and it's definitely not dead. The fact that big institutions are investing so much shows that things are changing for the better, and we can expect even more growth in the future.

But it's not just about making places to trade tokens; big banks are also getting into the business of keeping digital assets safe. State Street launched a digital asset division, Komainu got $25 million in funding, and Citi is acting as a custodian for digital bonds.

The entry of these big players is great for the security token world. They bring a ton of experience and money, which will make the market stronger and more reliable. Plus, their involvement adds a level of trust that can attract more regular people to invest.

So, why are these big players interested in security tokens? Well, it's because security tokens come with many benefits:

  1. More Trading Time: You can trade security tokens all day, every day on decentralized exchanges.
  2. See-Through Transactions: Everything that happens with security tokens is recorded on the blockchain, so it's transparent.
  3. Efficiency Boost: Security tokens can automate many manual functions in trading, making it faster and cheaper.
  4. Global Reach: You can trade security tokens anywhere in the world, so there's a bigger pool of investors.
  5. Follow the Rules: Smart contracts in security tokens can automatically make sure everyone follows the rules, cutting down on the need for manual checks.
  6. Own a Piece: Security tokens can represent a tiny part of something big, like real estate or fancy art. That means even small investors can join in.
  7. Anytime Trading: Thanks to decentralized exchanges, you can trade security tokens whenever you want.
  8. Cost Cutters: Security tokens can bring down the costs of making and trading securities because many of the old-school processes can be done automatically.
  9. Quick Deals: Security token transactions can happen almost right away, so you don't have to wait long to finish a trade.
  10. Super Safe: Since security tokens live on the blockchain, they're extra secure compared to regular securities.
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Institutional Adoption for the Tokenization & Security Token Industry
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