Binance on track to offer security tokens, pilot commences 2018
"Today's announcement marks a new chapter for Binance's development."
Binance is set to begin work on an exchange that can support security tokens, following a trilateral partnership between Malta, Binance and Neufund. In particular, it aims to offer an entirely new breed of offering in the form of ETOs - Equity Token Offerings.
The pilot program will kick off on Neufund's primary ETO market sometime in 2018, after which Binance will list these securities tokens pending regulatory and listings approvals.
"Today's announcement marks a new chapter for Binance's development, with the goal to tokenize traditional financial assets," said Binance CEO Changpeng "CZ" Zhao. "We are glad to partner with Neufund over the pioneering idea to create a complete ecosystem for issuing and trading securities on Blockchain."
Malta provides the forward-looking regulatory environment and stock exchange, Binance offers liquidity and an exchange platform, and Neufund offers a platform for the legal tokenisation of securities.
Put together the result is a pilot program intended to help Binance be among the first cryptocurrency exchanges to offer securities tokens in a regulated environment, where securities tokens, including ETOs, can be offered and traded in a legally binding way.
"We are thrilled to announce the partnerships with Malta Stock Exchange and Binance, that will ensure high liquidity to equity tokens issued on Neufund," said Zoe Adamovicz, CEO and co-founder of Neufund. "It is the first time in history that security tokens can be offered and traded in a legally binding way. The upcoming pilot project will allow us to test the market's reaction and realize the overall project idea in an environment with minimised risk."
"We are delighted to welcome Neufund as our key partner in building a blockchain-based exchange that is fully integrated with established financial markets. With the upcoming pilot project we become a worldwide pioneer in digital finance," said Joseph Portelli, chairman of the Malta Stock Exchange.
Legal and regulated security token offerings have been something of a holy grail in cryptocurrency, and different exchanges are climbing the mountain in different ways.
Coinbase emerged as a frontrunner on 17 July with a US brokerage license as part of a recent acquisition, and now it's joined by Binance with a more tentative timeline, but a more detailed backbone that aims to encompass more groundwork and a whole new species of token in the form of the ETO.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, ADA