Security Tokens are widely mis-understood, even among the crypto community. Security Tokens, though a potentially revolutionary technology, are a niche financial use-case, in the already niche blockchain industry.
Tokenization of assets comes with many potential benefits, including fractionalized ownership, greater liquidity, direct asset trading, 24/7/365 availability, built-in compliance, and greater transactional efficiency.
However, these benefits are not well-known in the financial industry, as crypto has taken the center-stage with all its glitz and glamour.
Essentially, Security Tokens evolve traditional securities. In addition, Security Token Offerings (STOs) are more akin to private placement deals, or even Initial Public Offerings (IPOs), than to ICOs.
However, without mass awareness of Security Tokens, we can’t reach mass adoption. Barriers like regulatory uncertainty and fear, a lack of trust, and a lack of cooperation naturally result in a state of industry disarray.
This state of affairs has given rise to a number of trade association in the Security Token industry, that aim to educate and accelerate Security Token projects. The leading association, the Security Token Alliance, boasts over 82 partners.
Other trade associations include the Japan Security Token Association, which apparently has 1 partner, Securitize. In the US, we see groups such as the Security Token Academy, which lists 16 partners, and creates educational videos. These groups have come after more general trade associations such as the Blockchain Research Institute, which focuses on use-cases across a number of verticals.
There are a number of related organizations that keep track of industry players with lists and reports, such as STOblock, STOcheck, and STO Filter, though these are technically not trade associations. One player in this area that could be considered a trade association is the Security Token Network, that focuses on industry research.
Ultimately, given the number of trade associations relative to the number of Security Token projects, it would be good to see consolidation of associations, such that projects can more easily find an association with the most partners and largest network to benefit from.