Nearly two years ago (7th July 2017), Andreas Antonopoulos did a sharing in Kuala Lumpur. That ws the first time I truly get to know Bitcoin and the whole Blockchain revolution thing.
Some of the points he mentioned was quite alarming, such as the illusion of safety:
– failure is not an option
– we can all win
– it’s all upside
– this is a guaranteed investment
As at 4th May, 2019, nearly 2 years after his sharing, the article that appeared in Coin Telegraph titled “How Security Tokens Can Prevent an Impending Financial Crisis” seems to echo his points with this paragraph:
Sometimes, the unintended consequences of regulation are more damaging than the value proposition of that legislation.
(1) The barriers of entry to securitization markets drove the centralization of issuances to astronomical heights, as a few participants came to dominate the market.
(2) The combination of closed circles and high costs of issuance ran securitized portfolios into the billions and caused a domino effect upon failure.
(3) In addition, a lack of liquidity in private securities markets made it difficult to rebalance or break up portfolios by selling smaller positions to a wider pool of potential buyers — or even by selling individual assets.
Security tokens, assets backed tokens, could be one of the solutions to the shortfall in financial system we have today, as how the authors put it:
Many analysts predict that the majority of financial products will one day be traded on the blockchain as security tokens, with programmable smart contracts — and for good reason: Only security tokens can bring greater transparency, oversight, access and liquidity to the market.
As we are seeing more Blockchain and its practical applications (use cases) being announced, we shall see a more practical approach and implementation of the technology in the financial industry as time goes by. Blockchaining Sukuk should be something to watch out to.