👊🏽 [Analysis] Security tokens will be coming soon to an exchange near you – Sunny Dhillon

Security tokens are “any blockchain-based representation of value that is subject to regulation under security laws.” They represent ownership in a real-world asset, whether that is equity, debt or even real estate. With $256 trillion of real-world assets in the world, the opportunity for crypto-securities is massive, especially to assets that have historically suffered from limited commerce and liquidity. Security tokens are complex, requiring not just capabilities around trading, but also issuance and, critically, compliance. The launch of platforms like Bakkt and the SIX Digital Exchange confirm a few things:

• Most assets (stocks, bonds, real estate, etc.) will be tokenized and supported on regulated trading platforms
• Incumbents like SIX have a head start due to their size, regulatory licensing and built-in user base. They are likely to use this advantage to defend their position of power
• Most investors will never know they are using distributed ledger technology, let alone trading tokenized assets. They will simply buy and sell assets as they always have

Crypto companies will be competing fiercely with financial incumbents in the security tokens space. As the crypto economy matures, we’re inching closer to a new era of real-world assets being securitized on the blockchain in a regulatory compliant manner. The challenge for both traditional and crypto exchanges will be to educate investors about this new way to buy and sell investments while powering these securities transactions via a smooth, seamless experience.