Tokenisation of Securities: Real World Applications — Investor Autonomy (Part 2)
The traditional investment sector is tied up with outdated processes and barriers that make it inaccessible to many. Novice investors are intimidated by the high thresholds they need to pass to hit minimum investment restrictions, as well as the mounting costs of middlemen, fees and taxes.
The token economy is disrupting this. It is changing the landscape and breaking down the barriers that make the investment sector impenetrable to all but the wealthiest and well-connected investors. Tokenisation is opening up investment and making it a truly global enterprise that adds speed, liquidity, and ease of access to streamline the process for potential investors, regardless of connections and wealth.
How Can Security Tokens Break down Those Barriers?
Security tokens offer a new proposition, without the multiple friction points of traditional investments. With security tokens, there’s no need to rely on a middleman to manage your investment. The investor has full control over their level of investment.
Security tokens utilise Distributed Ledger Technology (DLT) to keep an immutable record of ownership and trading. This not only lessens the need for a third party to keep track of the stakes, owners, and trades but offers a greater level of security than previously found in investment. DLT is impervious to forgery or theft. All that is required is the safeguarding of private keys.
One of the greatest strengths of the token economy is the removal of geographic or global barriers. Traditional investment into foreign assets could fall foul of unfair capital controls, complex financial arrangements, or even a simple lack of opportunity. Tokenised assets open up the world for investment, creating a potentially fully global enterprise. This new token economy is breaking down the barriers for both new and established investors, turning illiquid assets liquid, and making the world our marketplace. Tokenise aims to utilise those strengths to open up investment to everyone. Ben Tubey, CTO at Tokenise, explains the core mission:
“Tokenise is looking to be an inclusive platform. We aim to have very low costs to enable people to buy into projects or businesses, and trade in and out with a minimum level of friction and cost.”
By removing two of the largest hurdles to investment — cost and trading difficulties — Tokenise can help connect the average person with investment opportunities, as Ben summarises:
“Tokenise gives access to a far wider portfolio of businesses and assets. Investors can choose which risk levels to incorporate into their portfolio. It can be used to support local businesses and infrastructure. By having larger numbers of investors it hopefully leads to greater liquidity, transparency, and increased communications as well as opportunities.”
If Investors Are Responsible for Their Own Investments, What Safeguards Are There to Protect Them?
There are multiple benefits to an investor gaining full autonomy with their investment opportunities. It not only reduces costs and time whilst increasing liquidity, but it also puts the investor in charge of their own fortunes.
The token economy is an exciting space. We are witnessing the evolution of a brand new ecosystem that is disrupting everything from currency and supply chains to online gaming and social interactions. Modern investment isn’t just about capital. It’s about becoming part of a community and feeling passion towards your investments. And while Tokenise can offer a wider portfolio of assets and businesses, it will not act as a middleman or financial advisor, as Ben explains:
“Tokenise does not and will not provide advice. Investors have to make their own choice as to whether it is an appropriate investment.”
But, there are safeguards in place to protect potential investors. Ben explains how investors are protected on the Tokenise platform:
“Investors will be provided with a suite of information, supplied by the token issuers. Tokenise will provide a due diligence questionnaire that token issuers are responsible for completing and, in some instances, they will also need to produce legal documentation along the lines of a prospectus that has been signed off by lawyers, accountants, advisors, or the regulator themselves.”
Tokenise aims to provide a secure and stable platform that opens up a broad range of investment opportunities accessible to everyone within a safe and regulated environment.
How Does Tokenise Make Investments More Accessible to the Average Person?
At Tokenise, we believe that the token economy is moving towards a more secure and regulated future, and we’re excited to be part of this movement, leading the way in tokenised securities. The Tokenise mission is to provide a flexible and stable platform endeavouring to facilitate the simple and easily-accessible trading of security tokens. Ben expands on this:
“We want to make it a fully inclusive marketplace so that someone in Zimbabwe has the same opportunity as someone in the United Kingdom. By allowing people to whitelist (pass KYC/AML and appropriateness tests), Tokenise aims to allow any investor from any country (subject to local rules) to be able to buy and sell tokens.”
We believe the token economy is creating a brave, new world of investments, and we believe that these should be truly global and accessible to everyone.
Tokenise is a Kession Capital Limited brand.