Top 6 Use Cases of Security Token Exchange

Business Software India   •  July 23, 2020

Security Token

The security token can be used for real equity or share for an investor. Security tokens confer the tangible benefit of the investors. STO is treated as legal, partial proof of ownership of a company. STO provides investors the security of a regulated instrument, combined with the agility and speed of blockchain.

Many governments are now interested to implement the Blockchain technology. Many corporate giants have recently announced platforms for trading security tokens, and in doing so hope to offer institutional investors a relatively safe and easy way to begin investing in blockchain.

The founder of the company that owns the NY Stock Exchange, for instance, recently announced a new venture, Bakkt, and the Swiss Exchange also plans to build a regulated exchange for tokenized securities.

1. Ownership in fraction build confidence of the Investor

Institutional investors never get proof of ownership of the business in which they invest their wealth. But STO provides ownership of a business entity in Blocks or Tokens. In real estate business scenarios, instead of spending millions of dollars for an entire property (or even a piece of artwork), you can spend far less and buy a fraction of that property.

2. Less time consuming

To clear the purchase of stock, traditional exchanges require min 2 days, whereas through blockchain technology the buy and sell transaction is possible within a few minutes.

3. Liquidity issue in real estate can be solved by STO

In real estate assets, liquidation is a big issue for investors. The hefty price tag and the nature of real estate investment are two hindrances. Traditional Investors scare to invest in real estate. Using Blockchain technology, the share of a real estate can be distributed through Security Tokens.

4. Tracking down the transaction detail in Blockchain Ledgers

Blockchain is such a disruptive technology that can track down each and every detail of financial transactions within a second. So, the invested money and transaction details can be saved securely in the blockchain ledgers and can be transparent to each investor.

5. Opening up Global Investment Opportunity

Foreign Direct Investment is such an instrument for a business opportunity that can not only able industrialists to act on their enterprises but also small or medium scale investors can invest in foreign companies, real estates.

6. Automated Fraud Detection

As STO development is completely a blockchain-based investment solution, fraud detection in a financial transaction or illegal intrusion of any fraudulent activity can be tracked down quickly and thus mitigate the trespassing activity.

Home: https://business-software.in/

Please Follow us in