Tokenized securities made available for retail investors
Interview with Desico Co-Founder and CEO Laimonas Noreika
Interest for tokenized securities has been growing lately as people begin to realize the potential held on the blockchain. As has been commonly mentioned throughout the public, traditional securities markets have many borders and inefficiencies that blockchain can improve upon.
At present, the cryptocurrency/utility token market is filled with difficulties such as fraud and purely speculative value, to name just two. Traditional securities are better in these areas, but have many limitations and borders. Tokenizing securities could prove to be the best of both worlds.
Several projects are currently making waves that look to be the foundation for the coming tokenized securities market movement. We recently had the opportunity to interview Desico CEO and co-founder Laimonas Noreika who gave some excellent insights into Desico, and tokenized securities as a whole.
There are many different thoughts and beliefs about the future of tokenization. Mr. Noreika had some interesting comments on whether or not tokenized securities would heavily impact/improve the traditional system going forward.
Laimonas Noreika: “I’m not sure that tokenization of securities will improve stock/equities markets dramatically – at least not in the next 5 years. Yes tokenization, together with blockchain technology, will bring partial ownership. Yes, it will bring more transparency. However, it will not change existing securities laws. Actually, I believe that tokens need securitization much more than securities need tokens, at least at the current stage of the market.”
Taking into account Mr. Noreika’s views on the future for tokenization, he doesn’t see tokenization replacing traditional markets, but sees the two working side by side.
Laimonas Noreika: “There are different opinions on blockchain and its impact on various industries. I think industries which require transparency and a large network of users (like payments or social networks) will be impacted dramatically. However, I do not believe that there is a chance to entirely replace the traditional financial system with only tokenized securities. In the best case scenario, both new and old financial systems should co-exist together.”
There are several different businesses throwing their hats into the ring to compete in building the tokenized securities space. Mr. Noreika gave some details on how Desico is unique in this developing market.
Laimonas Noreika: “First of all, Desico is available to retail investors. More and more solutions in the market tend to leave retail investors behind, as it’s easier to focus on institutional investments. At Desico, we believe that people who created a whole new financial market (ICO and Crypto market), should be the ones playing a major role in further development. Secondly, Desico aims to tokenize investments for early stage startups and revenue generating SME’s. We do not want to tokenize pension funds, investment funds, or real estate projects.”
The United States Securities and Exchange Commission (SEC) is also a very touchy subject in the cryptocurrency space right now. Desico also has a plan for dealings with the SEC, and complying for US involvement.
Laimonas Noreika: “The SEC has stated clear rules on how to deal with securities. Desico will comply with those rules, allowing only accredited investors to invest on Desico platform. However, we hope that in upcoming years the SEC will change its approach to investor accreditation. There are significant amounts of accredited investors who are not highly intelligent, but have enough money to achieve accreditation. On the opposite side, millions of smart people do not have enough money for accreditation, but have more than enough knowledge to decide where and why they want to invest. We want to see both of these groups included.”
As seen in life in general, first mover advantage is important (first mover referring to the first successful companies that are able to impact different industries). At his stage, Desico may be able to be an impactful first mover in the tokenized security space – But their primary focus is on creating true value for the public.
Laimonas Noreika: “First mover advantage is important, but not vital. There are many examples of when first movers didn’t win the race. The Desico team is focusing on value creation for our clients more than trying to leverage first mover advantage. That’s why we are creating an end to end solution to issue and trade security tokens in full compliance with the law.”
Desico also plans to run its platform on the Ethereum network. Many projects choose the ETH network because it’s arguably the most proven, with the best development.
Laimonas Noreika: “Ethereum is the only network that is live and working without major disadvantages. Moreover, the network is being developed so we hope to have less and less limitations in the near future.”
Desico seems to have a great approach to the tokenized securities market on the whole. It will be interesting to see how they develop and implement their plans into the market over the next several months.