The blockchain-based security token offers a new and potentially lucrative opportunity for investors. But it might not be quite ready for prime time.
Bitcoin gave rise to blockchain, the latter created to serve as a distributed ledger of transactions involving the cryptocurrency. Subsequently, blockchain technology saw the emergence of the security token, a virtual instrument that serves as a representation of underlying assets recorded on a blockchain. But what is this strange animal, anyway? How is it viewed by the U.S. Securities and Exchange Commission? How does it differ from the utility token, which was also created to support blockchain development? On this episode, we get answers from Juan Hernandez, chief executive officer and founder of OpenFinance Network, an alternative trading system (ATS) that provides a market trading platform for digital assets. Find out why Hernandez views the security token as the “missing variable” in facilitating a new era of “smart securities” — even as key aspects of the technology remain to be codified.
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A speech by SEC Commissioner Hester M. Peirce on the agency’s stance on blockchain regulation.
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