In spite of their relative youth, security tokens have been lauded as the inevitable future of the crypto and blockchain industry. While some pundits would beg to differ, security tokens moved a step closer towards global adoption on Thursday, as it was revealed that Bithumb has plans to launch a cutting-edge U.S.-based platform.
South Korea’s Bithumb Joins Hands With US-based SeriesOne
Per an exclusive report from Yonhap News, a Seoul-based news outlet, Bithumb, a leading cryptocurrency startup in South Korea, has just inked a strategic deal with SeriesOne. The unexpected deal, which was relayed by anonymous industry sources, reportedly outlined a collaborative effort between the two aforementioned entities that would see SeriesOne, an America-based crypto-centric crowdfunding portal, help Bithumb establish a platform in the United States.
The platform, which will be backed by “technical support” from SeriesOne, will reportedly be hinged on the trading of security tokens, which are blockchain-based tokens that mirror real-world assets deemed securities by financial regulators.
Commenting on the apparent move, an official from the aforementioned South Korean cryptocurrency platform told Yonhap:
“SeriesOne actively sought to strike a deal with Bithumb after assessing it as the most suitable partner… Bithumb will ramp up efforts to develop into a global financial firm as the blockchain-based asset tokenization is expected to spread globally down the road.”
According to those familiar with the matter, SeriesOne is eyeing to launch the security token platform, which remains unnamed, in the U.S. during the first half of 2019. While SeriesOne is a lesser-known startup in the broader cryptocurrency ecosystem, many have high hopes for the partnership, as the crowdfunding firm has been accredited by the Securities and Exchange Commision (SEC), the de-facto regulatory face of America’s financial markets.
On the other end of the partnership, SeriesOne has established a South Korean subsidiary, presumably with Bithumb’s help and local expertise, to issue and offer security tokens within the Asian nation.
This move comes only weeks after Bithumb and One Root Network unveiled their globally-focused decentralized exchange (DEX), which allows consumers to issue crypto-to-crypto trades without routing their information through a centralized authority or body.
The Push For Security Token Adoption
For the uninitiated, as alluded to earlier, security tokens are a recently-established genre of cryptocurrency that allows for retail, institutional, and merchant investors to hold securitized assets, like shares, bonds, and options, via blockchain technologies.
While the classical management system for securities is still functional, the sentiment is that over time, as crypto assets continue to garner traction, consumers and corporations alike will seek to make legacy programs more effective, cost-efficient, decentralized, and easier to track by situating said programs on blockchains and similar contemporary mediums of data storage.
And although security tokens have yet to see worldwide approval, this sub industry has seen its fair share of positive developments in the past few months.
In early-September, David Sacks, Paypal’s former chief operating officer, was revealed to have joined the advisory board of 0x, the company behind the well-known decentralized exchange protocol that shares its name. As per a Fortune report, Harbor, a compliance platform aimed at the security tokens space, will be working with 0x alongside Sacks, who is invested in Harbor. Speaking on the partnership 0x CEO Will Warren, who is a die-hard for tokenized securities, expressed his excitement for this emerging cryptocurrency type, stating:
“In the next five years, there will be a massive shift away from securities being in closed systems that are highly regulated and hard to access. It will be a much more open system where trading location is less important. But for this to happen, there needs to be a security token tech stack.”
“Tokenized securities are bridging the gap between traditional financial markets and crypto markets because they are aligned with everyone’s interest. Regulators want to protect the investors, investors want their assets tradable, and crowds from all over the world want to invest in the most promising startups at an early stage.”
So make no mistake, although security tokens may seem like nothing more than a catchy buzzword, this innovation, which is still getting fleshed out, could be the sole catalyst that pushes the cryptocurrency market to new heights.
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