While expensive watches, valuable works of art or luxury real estate were previously reserved for high earners, you can now invest in tokenized assets with little money.
The idea behind security tokens is to represent a specific asset on the blockchain as a token. This could be, for example, a Rolex, a rare work of art or even a classic stock.
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From a regulatory perspective, security tokens operate in the same area as traditional securities and are treated as such by the supervisory authorities. This also includes, for example, creating a securities prospectus, which must contain all important information about the issuer. When issuing digital securities, the requirements of the respective financial regulator must be met.
The key difference between digital and traditional securities is the medium. While security tokens exist on a specific blockchain, classic bonds and shares, for example, have to be documented.
Security Tokens: What are the advantages of digital securities?
“Splitting” assets through tokenization brings with it some advantages. These primarily relate to the aspects of costs, processing speed and liquidity. This allows issuers to economically develop asset classes in small ticket sizes that were previously not attractive for cost reasons. This in turn also benefits small investors, who gain access to assets that were previously only reserved for professional and institutional investors.
In the future, it can be assumed that all securities will be securitized purely digitally in the future. Accordingly, it makes sense to get to grips with the new securities medium at an early stage.
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