What does your company do? What are its key differences from competitors?
We operate an STO issuance platform with a primary focus on Europe. We have a focus on white-label partnerships so our solution is targeted towards easy customization and branding such that partners can operate it. In addition we are working a legal framework for tokenized equity that will make this much cheaper and easier.
Can you describe the process of asset tokenization in simple terms? As if you explain it to a person without special technical knowledge.
The ownership of an asset is represented as a token on the blockchain. So, similar to a bitcoin, a share or a bond can be represented as a token that can easily be transferred from one wallet to the next – in a fully digital fashion, completely separated from paper based stock certificates, etc.
ICO was conceived as an opportunity to collect money without state control. In STO, this control is present. Do you think that this approach is contrary to the interests of society?
Not at all. State control is a part of society as well. The “state control” that is used in relation to STOs is primarily for consumer protection. If the same “state control” had been used for ICOs, a lot of people would have avoided losing money.
All assets and securities will eventually be tokenized, within a few years.Claus Skaaning, CEO of DigiShares
What are your forecasts regarding security tokens? Will they occupy a narrow niche or become a truly mass phenomenon?
It will become a mass phenomenon, but perhaps not as people expect. All assets and securities will eventually be tokenized, within a few years. But the majority of this tokenization will occur within existing financial players and infrastructure and will not lead to new market growth per se. Still, overall it will lead to the disappearance of many financial players acting as middlemen in processes – and a massive reduction of fees. So many financial services related to the issuance, trading and management of securities will become cheaper, more transparent, more efficient, less error-prone and more accessible to retail investors (~ democratization).
If you had the opportunity to tokenize any asset in the world, what would it be and why?
Real estate – it is boring but it makes sense. Normal entry ticket is at least EUR 10,000. With tokenization, this can be reduced to EUR 100.
Claus is the CEO of DigiShares. He has a PhD in computer science and AI, and many years experience as an executive in software companies. He has been granted 7 patents and has advised many startup companies. He has been working with security tokens since January 2018 and so is one of the pioneers.