According to technologists at the Ethereum conference ETHDenver, cryptocurrency securities are years away from mainstream adoption despite growing interest in the industry. The high expectations for crypto and blockchain assets to replicate and represent securities may not be in line with current market situations.
Too early for crypto securities to go mainstream
The recently concluded conference produced a significant amount of discussion on the issue of crypto and blockchain securities. Tal Elyashiv, the co-founder and managing partner of blockchain venture capital firm, SPiCE VC, said the concept of crypto securities remains in its infancy. His company, SPiCE VC, was one of the first to release a crypto security under existing U.S. securities laws as a way to offer immediate liquidity for its venture fund.
Elyashiv said that, when it comes to tokenized securities, the infrastructure in place to help it reach its potential is yet to fully mature. Things might change over the coming years, however, with Elyashiv predicting the development of significant pieces of the business infrastructure and the entry of institutional investors into the market this year.
Elyashiv emphasized that a security token is more complicated than just the name. He said, “When you talk about a security token, it’s a token representing a security. It’s not just a name. It means not just what the token is, but how the whole process is managed throughout its lifetime.”
The regulation of crypto assets has taken center stage globally over the past few months. Elyashiv believes regulatory uncertainty will continue for another year, as government officials come to a clear distinction between security tokens and other forms of crypto assets that function as commodities.
The other experts present at the conference agreed with Elyashiv’s point. The COO of security token advisory firm Satis Group, Shala Burroughs, director of digital asset services of crowd equity platform Republic, Frederick Allen, and CPO of security tokens trading platform OpenFinance, Thomas McInerney, agreed that a more cautious assertion should be applied to crypto securities.
The experts advised cryptocurrency investors to be cautious when dealing with crypto securities until clear regulations are implemented. Shala Burroughs, COO of Satis Group, warned investors not to believe any exaggerated statement on the present maturity of the security tokens industry. “If you’re seeing articles that are reporting this vast groundswell of money into this industry, that’s not really in line with exact reality. It’ll take a few years for us to get there,” she said.
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