Overview of STO: Characteristics and Challenges of a New Method of Blockchain Financing

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Overview of STO: Characteristics, Regulation, and Development of Security Token Offering

STO( Security Token Offering ) is a new type of blockchain financing method, with the following characteristics:

  1. Reduce transaction costs. STO simplifies compliance processes through blockchain technology, reducing intermediary fees.

  2. Increase transaction speed. Compared to traditional IPOs, STOs can complete issuance and trading in a short period of time.

  3. Enhance asset liquidity. STO can tokenize illiquid assets, lowering investment thresholds.

  4. Strengthen regulation. STO projects need to pass compliance review, which helps to purify the market environment.

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Currently, the main securities markets' attitudes towards STO are as follows:

  • USA: The SEC views most tokens as securities and has established a related regulatory framework.
  • Singapore: Open attitude, but requires compliance with existing securities regulations.
  • Canada: Securities laws apply to digital currency issuance.
  • Japan: Allows registered tokens to be used as currency.
  • Mainland China: Currently prohibits STO.
  • Hong Kong: exploring regulatory framework.

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The issued STO projects include TZERO and others, but overall they are still in the initial stage. Investors can purchase through specialized STO exchanges, but they need to pay attention to regulatory requirements and lock-up period restrictions in different regions.

Overall, STO, as a new financing method, is expected to promote the development of blockchain projects under compliance, but it still faces many challenges such as regulation.

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