Search
  • redmattercapital

Digital Security Token: Reshaping the Financial Era!

The blockchain industry is not only powering the crypto world but reshaping the traditional finance sector as well. The most promising use case of blockchain is trading digital security token. These assets have the potential to improve capital market liquidity and efficiency. Tokenized securities are represented basically on the blockchain while residing on a decentralized network with the purview of traditional securities laws. Financial securities are fungible instruments that are used to raise funds in public and private markets.


Basically, there are three types:

1. equity (such as stock in public companies)

2. debt (such as bonds)

3. hybrid (combination of equity and bonds)


A recent study done by the Securities Industry and Financial Market Association (SIFMA) shows the global market value is $119 trillion. Undoubtedly, blockchain might become the underlying infrastructure for all digital security tokens, but the immediate winner is the private equity market that deals with a lack of liquidity.


digital security token
digital security token

How is Digital Securities Influencing Capital Raising?

The capital landscape has improved a lot in the last few years. All thanks to digital security tokens! Many businesses choose to hold security token offerings (STOs), which represent a fundraising mechanism to attract investors and Venture capital (VC) all around the world. Digital tokens remove the friction that hinders the transfer of private alternative assets by offering great efficiency and liquidity to issuers. Blockchain enables the public or private entity to tokenize securities. Smart contracts can run them in a trusted way. The results are pegged to the real-world value that connects blockchain applications with actual data.

These days capital raising process involves high cost as many processes are automated when issuers can fractionalize the most illiquid assets. The fact behind this success is fractionalization! The digital security token can now represent even the most illiquid assets, such as real estate and art. They can be globally traded on security exchanges and marketplaces. This step has been unachievable for privately held traditional securities. Today, investors can trade, buy or sell digital securities based on their eligibility. Even the funds that provide digital securities now let investors exit the market. And, that too without any painful process of including boards, accountants, and lawyers. Have we got a perfect place for all of your issues?


RedMatter: A Home for Digital Securities

With unique features and advanced security, RedMatter has become one of the main players in the emerging trend of digital security tokens. They provide new ways for investors to invest in real-world assets safely. The Proof of Asset protocol here registers assets on smart contracts. That, in turn, issues asset-backed security tokens traded on centralized and decentralized exchanges. Visit the website and learn more about the process.

11 views0 comments