Security tokens are cryptographic assets based on blockchain technology that are tied to traditional financial assets, most commonly debt issued by companies seeking to finance their projects.
This type of token grants the holder a range of rights, such as receiving monthly or annual dividends related to the profitability of the funded project and the amount invested.
How does it help? What are the advantages of security tokens when financing my company?
Issuing corporate bonds is a very common way to obtain financing for my company or for business projects that I cannot do with my own funds alone.
Security tokens can be issued from companies in STOs (Security Token Offerings) based on project participation in financing. This has several advantages over traditional forms of financing; one of them is liquidity, as investors can enter in relatively small amounts and only buy a portion of the project.
Another is visibility, as companies listing their tokens on markets dedicated to the sale or transfer of security tokens can improve the spread of their projects through the network effects generated by the platform itself.
Finally, blockchain technology guarantees the transparency and efficiency of the transfer of these tokens, reducing the bureaucracy required for transfer, making peer-to-peer transfers (between individuals) easier for investors who have invested and wish to dispose of their security tokens.
What to keep in mind when issuing security tokens?
First, it is necessary to be clear about the project we intend to raise funds for, so that it can be clearly presented to potential investors and that the publicity of the project and the token is transparent.
Second, we must define the economic rights we want to grant to token holders. If we only want to grant project-linked returns, we can choose to tokenize participating loans or joint accounts; however, if we want investors to be shareholders, we should seek to tokenize loans or bonds that are convertible into shares.
Finally, we must choose the market or location where the tokens will be sold, and the Participatory Financing Platform (PFP) that manages the receipt and payment of tokens.
What are the requirements for issuing my security token?
Whenever we issue debt of less than 8 million euros with a maturity of less than 12 months, our offering will not be classified as a public offering and, therefore, we will avoid preparing investment manuals that must be approved by the National Securities Market Commission.
Our STO and its whitepaper must be verified by an investment services company (ESI), however, this is a faster process.
What are some interesting modernization projects in Spain?
One of the projects involved in financing through STOs is the one that emerged in the Green Data Chain company, the technology arm of Seroil Energy Group and a partner of the LABE Group. By issuing debt that can be converted into company stock, they seek to expand their bitcoin mining capacity by purchasing new equipment. The main attraction of the project is the use of renewable energy to mine Bitcoin, even with negative CO2 emissions. This addresses the main drawbacks of cryptocurrency mining and gives the company a competitive advantage.
