Digital Asset Projection

October 9, 2022
Posted in News

Digital Asset Projection

1.Products and investment instruments:
The industry has evolved and is not only determined by the question of liquid or illiquid assets. Rather, macroeconomic issues such as inflation are also making investment instruments commercially interesting or eliminating them – who would currently invest in a debt instrument, better to invest in ownership of a vintage car.

The question of whether we actually need the blockchain for the new era and whether it is a decentralised or centralised financial system comes up again and again: different capital market regulations around the world would continue to support centralised financial systems while further efficiencies and greater transparency would support a move to decentralised finance – a convergence of the two and co-existent seems the likely future.

The regulatory classification of an investment instrument, especially of a security token is particularly important. Typification, detailed design and regulatory classification must be confirmed first and foremost. On the one hand, with the issuer and with the understanding of who the target investor group is.The investment instrument, a token in general is not only a form of raising money, the token can also be a carrier, an ambassador for the project or the company. A marketing tool to make the project known, a communication tool and carrier of economic benefits for the token holder.

Therefore, an absolute cost comparison with traditional ways is not purposeful, you rather need to look at the possibilities of a token in the long run.

2.Who is the token buyer, who is the customer ?
“Customer First” applies to any business, also for the successful sale of a token. Customer & issuer demands are critical drivers of future innovation. One thing is certain, regardless of the target group, the customer wants us to deliver the new asset classes, the new products, the new services: in a safe, secure, efficient, compliant and regulated way. Does a retail client know what he or she is buying? but also professional investors and institutional client?

Educate our customers on what are the new asset class possibilities, new product possibilities in investing and trading, in raising capital and liquidity, they are not interested per se in blockchain and other emerging technologies. They are interested in trusted infrastructure.

Different target groups also have different interests, investment goals and investment behaviours. Retail customers want to invest in products that are otherwise inaccessible, and professional investors will quickly adapt to security tokens, as the underlying is a traditional asset in a new wrapper.

Interesting to know:
-The majority is buying security token with fiat and not with crypto
-Successful issuances have had investors 55years+, not only the younger generation
-Professional investors, particularly asset managers are entering to the market now

Customers determine the “What”:
– What assets and securities to tokenize?
– What markets are attractive and have scale?
– What assets to tokenize to raise additional liquidity and list on exchanges to trade / price?
– What financial services customers want direct access too rather than via intermediaries?
Younger people and even and professional clients in financial markets want direct access, no intermediaries and want to see the utilization of emerging technologies, greater efficiency and eventually lower costs;
– What are the customers demanding?
New products, trust, b2c access (direct) AND on the other hand service providers that want these new target groups (younger people, gen.)

3.Legal Infrastructure
Protect the customer as Gary Gensler recently said, the persons raising money have to disclose various information to customers. That’s how our capital markets work best. We are currently seeing regulatory developments at different speeds. The EU has made a push with the DLT pilot regime, MiCA and the ECSP to further promote the development of the industry. Clarity is demanded and it supports investment protection.

These new regulations solve the issue of liquidity and secondary markets with the emergence of regulated secondary market platforms like us, ASSETERA.

The new regulations also mean that changes that have been planned for a long time are now being implemented. The issuer, if he or she has decided on a token project, should not have to think about licences and technology – trusted infrastructure companies (licences and technology) will give the issuer the possibility to use the token as a carrier. In this respect we need to see and keep relationships with the regulators as business / sparring partners to continue to develop the new era.

Technology is playing and will continue to play a key role as an “Enabler”! As soon as the token program is in place and the regulatory issues have been clarified, the second step is the technological implementation and the associated (given) interoperability.

The third step, distribution of token instruments is and remains the most difficult and most important step in the successful implementation of a token project, beside the need of secondary markets. We strongly believe, if we can offer seamless processes of primary and secondary markets, that any kind of investor will become interested in digital assets no matter!

We are in for a long term journey with you !