Security Token Offerings & their Application to Structured Finance

Moving to DeFi

– Subhojit Shome, Executive |


As per a Forbes article[1] published in early 2021, DeFi and Security Token Offerings (STO) had scaled new heights with 2020 being “a banner year for capital formation and secondary trading” using security tokens. DeFi applications were reported to be prevalent across 15 countries around the world (including the major developed economies) and 39 of the top 100 largest banks in the world were reportedly working on security tokens or blockchain applications. Expert estimates[2] predict the security tokens industry to surpass the market volume for cryptocurrencies in the next five years and in terms of issue proceeds, the global security token market reaching $3 billion by 2025.

Figure 1: Estimated Growth of Security Token Offerings (STO)[3]

Blockchain-based tokens can be described as digitally scarce units of value the characteristics and circulation of which are prescribed via computer code.[4]

Read more