Noelle Acheson is a veteran of company analysis and member of CoinDesk’s product team.
The following article originally appeared in Institutional Crypto by CoinDesk, a newsletter for the institutional market, with news and views on crypto infrastructure delivered every Tuesday. Sign up here.
With so much buzz around tokenized securities, compounded by strong progress from platforms and issuers, it’s worth looking at the hurdles still ahead, and what they mean for investors.
First, a brief recap: by “tokenized securities,” we mean a crypto asset that reflects an investment in things that do not typically trade on liquid exchanges. Obvious examples are real estate and private equity, but the concept can also apply to art, diamonds, ships and other coveted items that are difficult to exchange efficiently.
The technology for this is developing fast – platforms and specific token designs are emerging to make it easier for issuers, investors and regulators to get comfortable with the concept.
On a panel at CoinDesk’s Consensus: Invest conference in November, Harbor announced the launch of its platform with the first tokenized real estate investment trust (REIT), and an entire panel about crypto wealth management declared itself bullish on security tokens.
More recently, SharesPost, a broker-dealer and alternative trading system (ATS), said last week it had executed the first secondary trade of security token in which the assets were held in custody by the same ATS. This was a notable milestone because large investors are required in the U.S. to use a qualified custodian.
Why such enthusiasm? By wrapping a traditional asset in a tradeable piece of code,