Security Token Exchanges
Blockchain Guide, Exchanges

Security Token Exchanges

Blockchain technology has many areas of application, especially in tokenization. Traditionally, the technology has been extensively used in Cryptocurrencies such as Bitcoin, Ethereum, and Monero among others. The popularity of the technology has continued to grow and is now being used in security tokens. These tokens are bringing transparency and helping in addressing challenges associated with conventional security trading.

Just like with Cryptocurrencies, security tokens need exchanges to allow people to trade them. Here is a list of some security token exchanges and those to be launched in the coming months.

open

Open Finance Network (OFN)

Open Finance Network allows verified investors to purchase, sell, and manage their security tokens. The platform is the first US-based security exchange and is live now. The exchange only lists the tokens defined by its listing framework. OFN has introduced various approval standards such as S3, ST-20, R-Token, and DS Protocol.

OFN is closely working with banks, transfer agents, leading brokerage houses, and other prominent players in the securities market. The exchange has already formed a group composed of trading veterans, securities lawyers, and exchange technologists to play a leading role in this promising market.

tzero

tZero

Overstock has created tZero with the aim of creating a platform that supports security tokens trading. tZero has an excellent user interface that is easy to use. The exchange relies on matching engine, order management software, 15c3-5 risk management software, and other technologies to support security tokens trading.

Given the need to comply with the existing laws in the issuance and trading of the tokens, tZero is closely working with Polymath to simplify the process to the benefit of the users. The trading platform went live on August after the completion of the private sale of TZRO, its security token.

bancor

Bancor

Bancor is another exchange that promises to make security tokens accessible to more people. Investors on this platform do not have to look for a purchaser on the other side as they can sell the tokens back to the issuer directly.

Bancor security exchange supports continuous and automatic conversion of Smart Tokens with the listed security tokens on the platform. The technology used to power this function is comparable to Atomic Swaps. The exchange has BNT token that can be used with any pair of security tokens on the platform.

binance

Binance

Coinbase is popular as a Cryptocurrency exchange. Recently, the exchange expressed an interest in getting into the security token sector. The US-based exchange wants to support the buying and selling of security tokens on its platform. However, given its current location, it may take even years before the exchange gets the required banking licenses and brokerage status.

The exchange lately managed to buy Digital Wealth LLC, Keystone Capital Corp, and Venovate Marketplace Inc. However, these purchases would not have been possible if the exchange had not collaborated with businesses that have the necessary registrations and licenses. Although users are expected to begin trading the security tokens on the exchange next year, the specific date has not been given.

The use of blockchain technology in the security market is expected to bring various benefits to the sector including transparency, efficiencies, and security. The reluctance of most players in the conventional financial institutions will not stop the use of the technology in the sector. This is mainly because more people are becoming aware of the benefits of this technology.

November 9, 2018

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Samantha Mitchell


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