Wall Street Journal: Blockchain’s Digital Securities Capacity Could Reshape How Wall Street Works
The Wall Street Journal has recently published an analysis of how digital securities could affect Wall Street and how the market works. In the newspaper’s report, it is said that cryptos have potential but that the regulation may come in their way.
According to the newspaper, regulators and lawmakers are finally laying down the path for the creation of digital securities, assets that would be similar to cryptocurrencies, but could be used to represent stocks and other financial instruments.
Some states, like Wyoming, have recently passed some laws that would recognize this new kind of security and it looks like this may end up redefining the way see a lot in the financial market like what constitutes a digital security, for instance.
Many relevant companies like Goldman Sachs and Circle are starting to elaborate on this concept and there is no doubt that they want to seel them in the market soon. Digitization is simply a strong trend that cannot be stopped.
While a huge chunk of these companies still trashes Bitcoin, they are so much more open to new investments that are more similar to what they are used and this seems to be the case of securities.
With a new system based on the blockchain technology, creating a security could be something considerably easier when compared to the current process, which is simply demanding and slow. All the system could be tracked and verified so fast and the rise in effectiveness is so big that an idea like this one simply cannot be ignored for too long.
Mark Smith, the CEO of Symbiont, a platform that intends to build platforms for digital securities, affirmed that there is a “clunky middle layer” in trading these assets and that it can now simply be removed and there would be way less friction in the market this way.
The point is that we all know how much investors love money. Even if they are not so hyped about this right now, as this technology is highly disruptive, they will eventually understand that using the blockchain to digitize the process means profit, so there is literally no reason not to do it, except the regulators.
If the regulators are important in order to lay off the groundwork to use these new tools, they are also its major wall from taking Wall Street by assault.
Many people, like Warren Davidson, a Republican representative from Ohio, believe that regulating this technology is important because of its huge potential for disruption. However, it was regulation that basically killed the Initial Coin Offering (ICO) market, so now is actually the time to discuss all the aspects of the regulation cautiously in order not to kill the industry before it is able to bloom.
With the Token Taxonomy Act, Davidson wants to regulate cryptos using federal law. This could throw away the progress that was made in some more progressive states like Delaware and Wyoming and will be important in order to determine the future of digital securities.