Security token offerings (STO) had the possibility to become the next big blockchain-based investment vehicle but because of some barriers the desire didn’t come true. The barriers include high cost required to offer an STO (Security token offering), regulatory uncertainty and deficit of interest is existing in Thailand and Taiwan. In the process of STO, investors are issued a crypto coin or token representing their investment which is recorded on a blockchain.
Regulators started drafting laws to build a legal framework to allure this new type of activity in early 2018 especially Thailand and Taiwan first published legal frameworks for STOs and these legal frameworks weren’t eye-catching and meaningful to firms. Thailand and Taiwan are not thought of as financial hubs but overall it’s a worldwide barrier to STO. STP couldn’t attract institutional investors even through STOs are easier to understand compared to ICOs. But reportedly, in 2019 STOs had improved infrastructure technology and lower costs than when they were first offered in 2018. The improvement can enhance in 2020 because of initiating of design of platforms seen recently, emergence of a critical custody and control industry, bode well for the long-term maturation of STOs.
In some parts of the world, STOs are reportedly foundering. Reportedly, a Taiwan-based law firm Winkler Partners told through a spokesman that most blockchain companies in the island nation are generally issuing utility tokens instead of security tokens.
A ceased action
Thailand’s Royal Decree created a formulized a structure on Digital Assets Business for the taxation of crypto assets in 2018 and in 2019 this decree was expanded to allow for the creation of STO portals licensed by Thailand’s SEC. Five Digital Asset Exchanges got discontinued operations as of September 2019. On the other hand, in Taiwan, the Financial Supervisory Commission (FSC) revealed its first draft of its STO in mid-2019, calling them the ‘’world’s first STO laws but the process has ceased. Although local firms got green light to get the process started, no final framework has been published by FSC. But in this case, no interest came from blockchain startups.