Will Binance Join the Security Token and Futures Market?

Wilfred Michael 

Wilfred Michael

News reporter

19 February 2019,
15:30
Will Binance Join the Security Token and Futures Market?

Binance is currently dominating the cryptocurrency exchange market in terms of trading volumes, credit card integration, as well as popularity within the industry.

However, the emergence of the security token and cryptocurrency futures market raises the question of whether Binance will sometime in the future want to play in a different space.

Well, the exchange’s CEO, Changpeng Zhao provided the answers in a recent podcast with Bitcoin enthusiast and Morgan Creek Digital, CEO Anthony Pompliano.

When quizzed on what the big picture would be for Binance, Chanpeng Zhao outlined that offering security tokens and derivatives such as margin trading and cryptocurrency futures are plans the exchange will work on in the future.

“For security tokens, there are a few experiments run by different projects. We want to see how that market shakes up. We have licenses in a number of jurisdictions for that already,” Zhao acknowledged.

Moving forward, he highlighted the reason why they would rather look on while other startups scale the security token market.

“With Binance if we try something bad or something that step’s on someone else’s toe, then it will have a large (negative) impact” on the market, Zhao said.

Given that the fundraising mechanism plays a vital role in how significant the cryptocurrency industry will be in the future, he suggested that stunting growth for personal interest would be wrong.

Are STOs Gradually Replacing ICOs?

The shaky 2017 Initial coin offering (ICO) market led to the development of security token offerings (STOs) as a way to ensure regulatory compliance while projects raise fund from global investors.

Security token offerings (STOs) are aligned with local securities law, meaning that authorities in a region could endorse such an offering for its citizens. That means more security for investors and public acceptance for crypto projects, something that ICOs could not offer.

Evidence shows that countries are more open to approving STOs than ICOs leading to a belief among industry participants that the former will replace the latter soon.

In recent times, we reported that the Philippines had created an STO regulatory framework for blockchain startups in the country while elsewhere, the Jamaican Stock Exchange announced that it would add security tokens to its list of offering to citizens.

 

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