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NEO Lays Ground For Security Tokens

Can securities work better on NEO?

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If 2017 was the year of the ICO bubble, then 2018 was the year of wrong predictions. Not only did Bitcoin ETFs face continuous delays, but institutional adoption remained distant, and mass adoption even more so. As for the predictions of President McAfee, well, the less said, the better.

It was also supposed to be the year of security tokens. Remember those? Depending on who you asked, blockchain-based stocks and bonds were supposed to be worth either billions or trillions. While there have been occasional STO’s, the “year of security tokens” has fallen far short of expert predictions.

Perhaps part of the problem has to do with the underlying technology. As Crypto Briefing has previously reported, there are big obstacles in the way of mass adoption. Whatever advantages there are to blockchain tokens are diluted by the need to adhere to KYC/AML procedures and regulatory requirements.

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However, these digital securities might find more success on a different blockchain.

Due to the unique dBFT consensus mechanism, NEO is not susceptible to 51% attacks, and can process transactions with greater speed and finality than Ethereum.

NEO Global Development has recently announced a partnership to develop a security token ecosystem on the eighteenth-largest blockchain. In collaboration with Liquefy, the project will allow companies to easily tokenize their investments, which can then be easily traded.

Liquefy is a regulation-compliant protocol that will allow users to easily issue their own asset tokens, according to the project’s website. At present, the protocol is compliant with the rules of fifty jurisdictions.

“It is important to develop a security token standard while the industry is still in its infancy,” explained Liquefy CEO Adrian Lai, who emphasized that the unique characteristics of the NEO blockchain could offer improvements over other protocols.

What separates NEO from other public blockchain protocols is the integration of NeoID, which allows KYC, AML and accreditation status to be stored on-chain while maintaining privacy,” Lai said. “This allows issuers to monitor and maintain records of all transactions in the secondary market to remain compliant in the multiple jurisdictions.”

The Liquefy partnership is only part of NEO’s long game to become a compliant, low-friction environment for securities trades.

NEX, a security token for the Nash Exchange, launched on the NEO blockchain after a registered securities sale last September. Earlier this year, NEO formed the Digital Asset Alliance (DAA), in order to explore the security ecosystem. In addition to NEO and Liquefy, the consortium also includes Republic, Globacap, and DLx.

 

DISCLOSURE

Authors at Crypto Briefing are invested in cryptocurrencies. The author of this post may be invested in digital assets mentioned here.

Andrew Ancheta
Andrew Ancheta
Andrew is the Deputy Editor at Crypto Briefing. After many adventures in China, Vietnam, Persia, Cuba and Europe, he spent several years in Beijing, where he produced articles for the state media. Besides cryptocurrency, Andrew's also interested in travel writing and photography. His articles have appeared in VICE, Time Out, City Weekend, Badges, Scoot, Art Republik, CoinStaker and several other magazines and websites around the world. He now divides his time between Beijing and New York.

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