The Speed Dreams of Security Tokens

In capital markets, things can happen fast, and an investor who wanted to purchase an asset on Tuesday could be out of funds by Wednesday.

Security token markets do not yet have a CCP figure.

In crypto assets, lack of a fast trade cycle adds risk.

The requirement to have it on hand for immediate settlement could curb the growth of lending and collateralization, which would preclude the emergence of a sophisticated market.

Speed in settlement may reduce risk, but it adds a degree of inefficiency.

Of course, blockchain-based settlement must be faster than traditional settlement - blockchain cuts out middlemen, right? Fewer steps should mean faster transfers of assets and payment.

Unrealistic expectations will not help these new assets find their market.

What is clear is the sector's rapid evolution and its potential to help reform capital markets through the spread of blockchain-based assets and settlement.

All of the above is likely, but even once in place, there is no guarantee that security tokens will trade and settle faster than traditional assets.

Unlike in nature, the evolution of financial markets has shown us that speed is not always in our interests.