The idea of Security Tokens was to combine all the efficiency and low cost of ICOs with legal and regulated offerings. The reality is that not much is really happening currently  in  Security Tokens – as our News Quality Assessment (NQA) data shows.

We have been tracking the Security Token space since before it had an official name while the unregulated ICO wave was still cresting. Recently we created a unique way of tracking the news in this and other spaces – our News Quality Assessment (NQA) methodology. This gives us good data on which sectors are getting traction and which are not.

NQA tells us that not much is happening in Security Tokens today. Are Security Tokens taking a refreshing nap or in a coma at death’s door? All we know is that it is quiet out there.

Here is our analysis of why Security Tokens are in quiet mode. If your strategy is to offer a  regulated service you cannot fight the regulator. If you don’t fight the regulator, be prepared for a long hard, expensive slog to keep them happy with lots of resistance from incumbents and lots of bills from lawyers and other advisers.

In contrast, Bitcoin is totally unregulated and permissionless.  Bitcoin cannot be killed by regulation because Bitcoin is not asking for permission to operate.

If Security Tokens are in a coma it is tempting to blame the pandemic. The sort of people who like a regulated service tend to be risk averse and the coroncrash in prices of traditional securities has given those risk averse folks more assets to buy at reasonable prices.

What do you think? Are Security Tokens taking a refreshing nap or in a coma at death’s door?

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For context on Security Tokens please read the chapter on Security Tokens in our Blockchain Economy book and read articles tagged Security Tokens in our archives.

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