Security token: digital security more advantageous than a share?

Security token: digital security more advantageous than a share?

The Security Token is a digital security that can represent different types of assets such as a company stock, real estate, an artwork, a car… in fact, anything that can have value. Rather than selling shares in the capital of the company to finance itself (as a company would do through "venture capital" or during an IPO), a company can choose to issue security tokens to finance its project. The token then represents a share of the company and its value is indexed to the results of the company.

Real company shares can be blocked as collateral when issuing tokens, but this is not a requirement and rarely is! The token can give the right to a dividend which will be calculated on the profits of the company, and even sometimes on the turnover of the company, which makes the holding of the token more advantageous than the holding of a simple share . The regulatory framework is not the same for utility tokens and security tokens, the latter often having to comply with regulations applicable to the equity markets.

If the security token represents real estate or a work of art, then, after valuing the property, the owner of an apartment (for example) worth EUR 250,000 will be able to issue 2,500,000 million tokens each with a value of EUR 0.10. The token may give its holder the right to receive part of the rental income or simply to have a share of an apartment that could increase in value in the event of rising property prices. Whether for the example of stocks or for that of real estate, the Security token makes it possible to make certain types of investments more accessible, and more liquid investment solutions hitherto known to be illiquid. Reward token: the digital token that facilitates customer loyalty The "Reward" Token is close to what we know with loyalty points, except that they are redeemable and digital.

The best example is that of “Miles” points. Everyone knows the famous Miles that can be accumulated on different trips and which give the holder the opportunity to enjoy free travel or other benefits when he has enough. Now imagine that you can buy and sell “Miles” on a special stock exchange on which all the people who have Miles are connected… there you have your token reward! There is a good chance that many large companies can exploit this aspect of tokenization to offer loyalty programs. Imagine a future in which you can redeem your Carrefour loyalty points for “Miles” or for PizzaHut loyalty points. The Internet is a revolution that allows easier access to information, the blockchain is a revolution that makes it possible to facilitate and secure the exchange of securities of all kinds.