Aboveboard Securities Exchange’s Andy Singleton Says STO Market Outlook is ‘Near Death’


Andy Singleton, the founder of Aboveboard, a securities exchange, published an article in which he mentioned that the security token offering (STO) market is currently “lifeless.” Although there are several positive things related to blockchain technology and how it is implemented in the securities industry, there is poor liquidity and very little demand from investors.

He gave these comments in a recent article that starts by saying that the STO market outlook is near death. Although there are some companies announcing infrastructure and new deals, there are no buyers. According to Singleton, STO does not have sufficient liquidity and have very large fees.

He explained that the non-tokenized private security market has a volume of around $50 billion a day in new supply. Meanwhile, there have been less than 1,000 individuals participating in security token offerings until now.

Singleton went on explaining that STOs fail to disclose information allowing buyers to have a fair price. Moreover, these security tokens were not designed to rade with significant volume.

Nevertheless, STOs provide several technological innovations related to the securities industry. It is possible to have real-time royalties and also voting using security tokens, as Singleton explains.

He has also said that STOs need to add value to the whole securities sector.

Singleton commented about this issue:

“Putting an existing security into a blockchain wrapper doesn’t add much value to that security. The market will really take off when we see new types of deals and business models that require the flexibility of the tokenized format. […] Bitcoin is valuable because it did something completely new – it monetized and coordinated the efforts of an open source community.”

Singleton explains that more money will be changing hands just if blockchain technology is able to disrupt the public markets. Now, public markets have different complicated systems that interact with each other.

But changing these systems takes a very long time. As he explains, delivering securities in two days after a trade, when in the past it was three days, it took five years of planning. And indeed, this initiative became obsolete because blockchain is able to deliver securities with a real-time settlement.

This shows how slow the older system works and how complicated it is to change things. Nevertheless, STOs would have to perform better if they want to really change the way things are currently working.

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