Security Token Offering – new way of financing in the digital era

Seen Meng Chew () and Florian Spiegl ()
Additional contact information
Seen Meng Chew: CUHK Business School, Hong Kong, Postal: Room 1252 Cheng Yu Tung Building, The Chinese University of Hong Kong, Shatin, Hong Kong, https://www.bschool.cuhk.edu.hk/staff/chew-seen-meng/
Florian Spiegl: FinFabrik, https://www.linkedin.com/in/florianspiegl/?originalSubdomain=hk

Journal of Financial Transformation, 2021, vol. 52, 142-151

Abstract: In this article, we compare the fundraising processes of initial public offerings (IPOs) and security token offerings (STOs) and explain how the STO process can be operationally more efficient and less costly using distributed ledger technology. We also highlight recent technological advancements surrounding STOs and the world of decentralized finance. We collate information about recent developments in regulation and digital exchanges to support the growth of STOs. We emphasize some important issues to tackle before STOs can be widely accepted as the new way of financing for companies. Finally, we argue that although STOs have the potential to revolutionize the security value chain, they do not have to replace IPOs completely, and the two channels can coexist to provide more opportunities for businesses.

Keywords: financial economics; financial instruments; business economics; fintech; innovation; corporate finance; technological change (search for similar items in EconPapers)
JEL-codes: G23 G30 M21 O30 O33 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jofitr:1658

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