Tokenized securities are a relatively new idea within the global marketplace. After all, STOs are in murky legal territory for much of the world. Despite this, some countries have gone out of their way to accommodate this quickly-growing financial sector. Which countries today are the friendliest towards tokenized securities and blockchain more generally?
Here’s five of the best countries in the world with the most hospitable legal environments for the security token industry today.
Malta is a small nation with a big love for blockchain. Not only is it the place with one of the few existing laws specifically for tokenized securities, but it also has an ample pool of talent and investors who are eager to enter this new market. Many STOs are flocking to Malta to issue and hold their token offerings with Maltese exchanges like LXDX planning to compliantly launch their own STO.
There’s a reason Malta has been known as a global leader when it comes to not just security token regulation, but the blockchain space more generally. This year, for example, it became the world’s first country to establish official regulations for cryptocurrencies.
Estonia is another country that is trying to follow in the footsteps of Malta by adopting a crypto-friendly legal environment where STOs can thrive. Estonia is also a highly-developed country with some of the highest internet speeds in the world: perfect for the tokenized security industry.
This year, Comistar Estonia launched their own security token offering platform which potentially opens up the entire EU region to STOs. Another security token platform, B2BX, was granted full regulatory approval by the state in an unprecedented move. All of this bodes well for the future of tokenized securities in Estonia and investors along with issuers would be wise to keep a close eye on this small country’s developments.
If you’re a security token issuer, Canada is an attractive option. Although there are still some pressing questions surrounding security token offerings (STOs), the country boasts a stable legal system and the prospects of licenses for exchanges dealing with tokenized securities seems right around the corner. Do note, however, that compliance costs are currently quite high much like the United States.
The United States
Speaking of which, the United States also makes our list for its relative promise when it comes to tokenized securities. Although the country does have some of the strictest regulations when it comes to securities, it seems likely that STOs might fall under the exemption clause of current regulations in place for crowdfunding. Not to mention, the United States has a relatively free market and is generally conducive to business expansion and general market innovation.
It seems unlikely that STOs will really take off until the American legal environment clears up which is why tokenized securities would be smart to base their operations in the United States.
Zug, also known as the “crypto valley,” has been a hub for blockchain developers since early 2017. Swiss regulatory authorities were some of the first in the world out of any country to clarify how ICOs and STOs operated from a legal perspective. Although there are currently no STOs in Switzerland, it seems likely that the country will become a hub for the tokenized security space in the next few years given its already-proven track record with established cryptocurrency projects.