Blockstream Launches ‘Liquid Securities’ on Liquid Network, Can Act as a ‘Bitcoin ICO’ for Security Tokens
One of the benefits of the progress blockchain and cryptocurrency is the fact that it is becoming much more accessible smaller firms and is not concentrated in the hands of big firms or governments.
When most people think of tokens being launched, they imagine it is being backed by a powerful corporation, a world government also on. This is now changing as Blockstream has launched a platform on the Bitcoin sidechain, Liquid, that will allow everyday users to launch their own tokens even without the need for coding experience.
This new platform was unveiled at Coindesk Consensus Conference 2019 and this is the first product of Blockstream has been launched on top of its Liquid network sidechain. The liquid network sidechain is tied to the original bitcoin blockchain but has increased speed and improved privacy.
Along with launching tokens, users can also manage them on top of the network. According to an article from TNW and their CSO Samson Mow, businesses are taking an interest in the tokenization of Securities but traditional blockchains might not be able to keep up.
“Unfortunately, blockchain platforms like ethereum are failing them due to issues with scaling, privacy, and reliability. […] Now, with the launch of Liquid Securities, businesses can quickly issue Liquid-based security tokens with the click of a button, and establish sophisticated rulesets to conform with their regulatory requirements with no engineering experience required,” he said.
Though the just launched, they already have a number of partners such as Zenus bank and TokenSoft.
With the platform, an interface is provided where businesses can issue and monitor their tokens and the platform also features options to create settings such as restrictions and investor accreditation.
A Matter of Regulation
While this new era might create a whole new level of accessibility for cryptocurrency in the business world and for smaller entities, it does need to be mentioned that this platform will be subject to a number of regulations.
First of all, the platform allows users to set their own legislative criteria for each token and this information is integrated into smart contracts. A member of the liquid team explained to Hard Fork that the platform will require some knowledge of securities legislation in the jurisdiction of the user.
This might not be enough as the tokens issued will count as securities in certain jurisdictions and all securities offered need to be approved and registered with various regulatory bodies such as the SEC in the United States.
A lack of registration of several ICOs led to a number of shutdowns in the last year and also tightened SEC surveillance with tokens and cryptocurrency in general. As of now, it is unclear how much regulation will be going on within the platform itself and what the consequences will be if regulations are not followed.
Such consequences might not only be limited to the individuals who make use of the platform, but might cause problems in the Industry at large. After all, the unregulated and often chaotic nature of ICOs led them to be banned in places like South Korea and the crypto industry in the United States is still struggling to get an exchange-traded fund approved by the securities and exchange commission.
While this new platform might boost accessibility, there is such a thing as too much accessibility and should self-regulation not take place external regulation will.