Securitize Issues First Dividend Payouts Via Blockchain for Security Token Holders

Securitize, an SEC-approved transfer agent built on blockchain has issued its first dividend payout. The firm distributed ‘royalty payment' on June 5 to stakeholders with security tokens. This marks the first on-chain dividend/interest payout by Securitize since its debut as a regulated entity in keeping securities' records.

Basically, Securitize focuses on the maintenance and update of security records as well as dividend disbursement via blockchain. The firm's role has since attracted a significant clientele with being among the portfolio.

Following its recent milestone, the company's CEO, Carlos Domingo, has touted Securitize smart contracts as the ‘future' of dividend payouts. Speaking to CoinDesk, he argued that this is because:

“the token ownership records update in real-time and can integrate right with the means to deliver the payouts.”

He went on to highlight that existing payout methods within stock markets are quite costly. It, therefore, results in dividends being eaten up by current market players in the name of margins which eventually translates to profits for them. In this case, Domingo gave an example of Computershare which also acts as a transfer agent.

Most of the token holders requested to receive their dividends based on the USDC stablecoin. Domingo noted that this approach made the process more seamless:

“The whole process much more efficient and streamlined than sending an ACH, a wire, or a bank transfer.”

Securitize History in Transfer Agency

This firm was granted an SEC approval back in August 2019. Interestingly, its application was reviewed and approved by the U.S financial markets watchdog within a period of 10 days. According to Securitize, this process was fast since they had prepared for around 6 months to face the SEC for a transfer agency approval.

One of its competitive advantages is zero fees as a transfer agent; such services can be as expensive as $150 normally. This underlying value has attracted good funding for project kicking off with a series A that gathered around $14 million.

Securitize now plans to scale its blockchain-based dividend disbursement with its real estate partners according to Domingo. The firm operates along with peer competitors which include TokenSoft and Harbor, which was acquired by BitGo.

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