The Israel Securities Authority (ISA) is proposing to create a platform for trading security token offerings (STOs), Reuters reports. By turning to the burgeoning financial sector, the regulatory watchdog wants to lure in more investors.
Attracting more capital
The number of publicly traded companies has declined over the last 10 years. In order to tackle this problem, Tel Aviv wants to allow companies to raise capital by issuing digital tokens.
According to ISA Chair Anat Guetta, the 2018 cryptocurrency market crash didn't take its toll on the underlying technology, Blockchain.
Ensuring investor protection
While the nascent technology holds a lot of promise, it's also crucial to make sure that investors are safe. The loosely regulated ICO market proved that a lot of homework had to be done when it comes to taming the ‘Wild West’ of cryptocurrencies.
ISA is mulling over applying securities laws to digital assets. Companies that are willing to issue digital assets will be put under intense scrutiny with ‘unique’ disclosure requirements.
Everything will be tokenized
Israel is not the first country to jump on the tokenization bandwagon — the UK and Australia are currently working on similar platforms.
As reported by U.Today, cryptocurrency unicorn Circle completed the acquisition of crowdfunding startup SeedInvest to focus on tokenization. Meanwhile, recently launched exchanges, such as Estonia-based DX.Exchange, allow purchasing the shares of US tech behemoths in the form of digital assets.