The STO Issuance Platform in Europe: Tokeny | Digital Security Frontier Vision #12
Welcome to Digital Security Frontier Vision: The Voice of the Core Builders from Global Digital Security Industry #12 .
Luc Falempin, CEO of Tokeny. he has been immersed in technology solutions ever since he founded his first business ventures in 2012. Being in the first generation to learn web technology at school, he graduated with a BA (Hons) from University of Montreal, achieved an Ebusiness MBA at Institut Léonard de Vinci (Paris) and received a web analytics diploma from University of San Francisco. In 2017, Luc sold his stake in Izberg to focus on Tokeny, a technology solution with the vision of disrupting traditional finance to bring more fairness, transparency, and inclusivity to capital markets.
In this interview he will show us his opinions on the Development of European Digital Securities Industry.
Enjoy the Interview！
1. What’s interesting about Europe’s STO regulatory policy?
Europe is really proactive in the space. Several countries have already defined the different types of tokens and they have agreed that security tokens fall under typical securities laws.
The financial market in Europe is well unified, thanks to ESMA and local regulators working closely together. Some financial instruments in the EU can be “passportable” which means the issuer only needs the approval in one member state to be able to distribute the instrument across other European members.
This is the case with the Prospectus Regulation, which allows European companies to raise up to EUR 8 million every 12 months from retail investors through the creation of a simplified information document.
2. In Europe, what are investors’ attitudes toward digital securities?
The general view in Europe is quite pragmatic. It’s generally known that improvements in technology will reduce costs through greater transaction speeds and automation capabilities.
However, current attitudes towards investments will of course remain, and the quality of the underlying asset is still of utmost importance. With the industry getting more and more mature, it will become easier for investors to find and analyze digital asset investment opportunities.
3. As a well-known issuance Platform in Europe, what is the biggest difference between Tokeny and other issuance Platform?
Tokeny is the only end-to-end solution on the market. Issuance is important, but issuers and investors benefit most from tokenization in the servicing of securities post issuance.For issuers, Tokeny allows firms to automate the servicing of securities and enables them to remove existing friction points in the value chain. Tokeny allows investors to participate in security offerings with increased ease, speed and efficiency.The solution is also unique in terms of identifying users on the blockchain infrastructure in order to apply compliance.
Thanks to blockchain smart contracts, we have built a securities transfer validator that enforces compliance in every trade.
4. What are Tokeny’s requirements for the issuer (or issuing assets)?
Tokeny can work with issuers across 5 continents, targeting key investor jurisdictions. The offering has to respect the local and international regulations, and the project needs to be credible, asset backed, and managed by an experienced team.
5. Has the ecosystem of European digital security industry been formed? How is it developing?
It’s in progress, of course. The infrastructure is building, stock exchanges and custodian services are coming. More specifically, the biggest financial institutions are now all working on new services to help their issuers and/or investors issue, manage and trade digital securities. We are helping these institutions achieve this by providing the secure and user-friendly technology required for firms to digitize their processes, so they can enforce global compliance obligations, enable automation and drive efficiency. Delivering solutions via APIs, Tokeny’ s services can be easily embedded into existing systems, allowing institutions to remove existing friction points in the value chain:
6. According to your observation, which industries are the partners who cooperate with Tokeny to issue digital securities mainly from, The traditional industry or the blockchain industry? What kind of trend does this reflect?
Tokeny works mostly with companies from the finance industry. We use a lot of blockchain tools and collaborate with developers from Ethereum. However, our main role is to make this technology accessible for business purposes. Therefore we need to understand the business needs and to explain where our solutions fit in the value chain.
7. In Europe, how do issuers choose an exchange (or trading platform)?
With our services, P2P trading is already possible. But the secondary market is still not there, currently there is no authorized exchange for security tokens in Europe, although many are in development. Our T-REX (Token for Regulated EXchanges) Ethereum standard of token will be compatible with the key exchanges.
8. In Europe, how is the fundraising situation of STO?
European issuers can raise up to 8m with a prospectus exemption, meaning issuers can target retail investors, lower legal fees and publicly market their STO. The combination of a digital experience and blockchain technology allows issuers to benefit from a faster time to market and the ability to quickly onboard investors. This is why we have launched ST8.fr for French SMBs. We’re still at an early time in the market, and investors are still waiting for good asset backed projects to jump in.
9. Now there are many kinds of statements about the issuance of digital securities. such as IDO, STO and DSO，Are the meanings of these words very different? How do you see this phenomenon?
Tokenization is a new way to transfer securities, a representation on the blockchain. Calling them digital securities, security tokens or something else doesn’t matter much.Indeed, achieving standardisation globally is still something that needs to be reached, but regulators and industry bodies are working to achieve this.
The tokenization of existing securities is something that is completely possible today, with the same issuers and the same investors, so the terminology for these instances does not need to be created as it’s only the format that has changed.
10. Many people think that the biggest problem of digital security industry is the lack of liquidity. What do you think? As a leading issuance Platform, how do you solve this problem?
The Tokeny compliance system brings transferability to illiquid assets.Assets that are time consuming to issue and trade, as seen in private markets, can benefit from this new technology. Particularly when coupled with exchanges, the transferability of these assets will increase greatly and the industry will benefit from an increased amount of liquidity.
At Tokeny, we have the technology to launch a DEX (decentralized exchange) for security tokens, but the missing segment is a good and regular source of tokenized securities.
11. What does Tokeny think of the Chinese market?
The Chinese market is very unique, but the opportunity is significant as there is a tremendous amount of financial power. Additionally, the blockchain brings transparency and automation, which will allow Chinese authorities to have more control over the country’s capital markets.
- Check Chinese version of this interview here
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