Crypto Firms Unveil Security Token Issuance, Trading Service
At least two digital currency startups are planning to modernize and enhance the process of issuing and trading security tokens. According to the official report, this can be achieved by way of providing an all-in-one solution.
Digital Security Offering
The two companies in question are Securitize and OTCXN. The former is basically a Coinbase-powered security token firm while the latter is a blockchain infrastructure company. The two firms are expected to team up in order to develop and provide a digital security offering service.
Under the arrangement made just recently, the companies are going to provide support to other firms and sell securities. The process will be made possible through the combination of Securitize’s securities compliance platform alongside OTCXN’s custodial ledger system.
The CEO and co-founder of Securitize named Carlos Domingo said that his company is responsible for creating and facilitating the sale of the tokens in compliance with the existing security laws in each of their client’s jurisdictions.
Rosario Ingargiola, the founder and CEO of OTCXN, on the other hand, stated that Domingo’s firm would create the much-needed security tokens on the Ethereum blockchain. This will be done through the use of the ERC-20 standard and, at the same time, handle the initial assurance. Also, there will be a smart contract in place, as it will be used in enforcing compliance procedures.
Ingargiola’s firm would then be responsible for providing the infrastructure needed to support secondary market trading of the aforementioned tokens. It should be noted, however, that the tokens are not to be traded. That is because another token is expected to be represented in behalf of the securities and transacted.
Trading With No Custody
Custodians like the Kingdom Trust would simply store the security tokens via its specific system. The latter, in particular, may reportedly include cold wallets. From there, there will be a digital representation, which is simply the actual object traded on the system of OTCXN.
Ingargiola said that under its company’s model, investors and issuers will have the ability to trade assets with anyone on the network. And this will be made possible regardless of the blockchain these assets are natively issued on.
It holds true that the above-mentioned digital representations could be traded on the OTCXN’s system. However, Domingo clarified that issuers and investors will still own the security. Ingargiola also echoed the same idea, adding that people do not necessarily have to trust them since the companies are not custodians of any assets.