The London Stock Exchange has granted permission to issue its first Security Token Offering (STO) or Equity-Token Offering (ETO). 20|30 is the limited private firm that has been accepted into the Financial Conduct Authority (FCA) Sandox 4 and will conduct the STO.
Beginning of An Era of Blockchain Tokens
The tokens will be recorded on the blockchain and would be administered decentrally. The test phase of the offering has already been conducted with the parent firm, 20|30 which will provide the platform for tokenizing all securities. Blockchain tokens will increase the efficiency and efficacy of exchanges and trades conducted in the LSE. It will also increase the transparency of trades and increase investor confidence.
The firm has already acquired an initial SEED funding amount of 1 million Euros and has begun the test phase of issuing tokenized equities. The tokens are issued on Ethereum based smart contracts. The new efficient system of offering securities will reduce trading fees on the futures market by 85%.
The Telegraph in the UK reported that:
Around £3m worth of shares in 20|30 were issued in token form and settled in a test environment on the LSE’s Turquoise equity trading service.
Equity in a financial company will be sold through TokenFactory, a product of 20|30. Moreover, the shares will be subjected to a one year lock-in period. Furthermore, only institutional investors like banks, brokers and specialist trading firms will be allowed to participate in the private offering initially.
While 20|30 is a startup, it has worked closely with Nivaura, a Blockchain based start-up focusing on capital markets. Nivaura has attained an investment of 20 million euros from the London Stock Exchange and law firm Allen & Overy and Linklaters.
20|30 CEO, Tomer Sofinzon said:
“Tokenisation will unlock value in a whole range of assets, from existing shares to new issuance, bonds, property, IP, fine art and much more.”
The cryptocurrency community is also excited about the tokenized sale in one of the oldest and largest Stock Exchanges of the world. While the tokenized security is only available for institutional investors now, it will be soon be made available to retail investors opening a whole new secure portal for asset exchange.
Has the must anticipated era of the tokenized economy has begun? Will it favor the crypto markets or lead to further centralization? Please share your views with us.
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Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com