Digital securities convert rights to an asset into a digital token on a blockchain. They transform private securities by making capital formation faster, easier, and less expensive while unlocking secondary liquidity (and value) for investors.
Once someone buys digital securities tokens, nobody can erase, falsify or change the record of ownership. The data cannot be altered or manipulated by a single actor. Auditing will become greatly simplified in the future because the ledger provides the assurance of the transaction data trail.
Digital securities tokens can be accessed from any place in a world, 24/7 via a web application or a smartphone app.
Digital securities tokens represent the promise of greater liquidity, which increases the expected value from trade and eliminates the need for minimum investments. Fractional ownership can increase portfolio diversification and spreads risk as investors can now co-own many assets at once.
Faster Deal Execution & Settlement
Transactions can be settled in near real-time, especially with XDEX, which can handle 100k transactions per second at scale.
In many cases, digital securities can eliminate the middlemen, which often limit investment accessibility by restricting investments to accredited investors only, demanding high fees and requiring an access to stock-trading accounts.
Digital securities tokens eliminate asymmetry of information present during the transfer of ownership.
Provides liquidity to private assets that currently find it difficult and costly to match buyers and sellers. Investors can trade real-world assets that due to their low liquidity would have been difficult to exchange in the past. The illiquidity discount can be as high as 30%, which significantly reduces the overall valuation of the asset.
Programmable Compliance & Reporting
Regulatory compliance at the jurisdictional level can be coded into the logic of software. This reduces the chances of error, the cost of compliance and reporting. Over the life of any security, this could represent a significant amount of overhead reduction as the regulatory environment evolves to bring that efficiency.
Presently, many high-value investments are not accessible by a large percentage of the global population. New models of capital formation secured by distributed ledger blockchain technology represents an evolution to global capital markets and capital mobility.