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NYC Security Token and Stablecoins Roundtable

Joined by leaders from all over the world, the Security Token and Stablecoins Roundtable, was held by FinTech4Good in BNY Mellon New York headquarter on October 4th, 2018 featuring the launch of a Responsible Blockchain Report- September Market Insider. In the September edition of this monthly report, we provide a birds eye view of the key market trend of blockchain investment around the world. In September 2018, 9 companies completed their fund raising efforts, while 6 companies are still on track. The listed 15 companies have raised $220,892,751.00 in total. The majority of the funding went to blockchain protocol and blockhain for finance and data service. The report also featured key players in the digital asset backed lending innovations from different countries and FinTech4Good’s Responsible Blockchain US Championship program. “The Responsible Blockchain Report is one of many efforts that we will launch in supporting the emergence of a healthy global blockchain ecosystem. Another ongoing project is to identify and help to scale the most promising blockchain innovations through our Responsible World Championship. “You will see names of top blockchain investors who will join hands with us in this effort”, said by Xiaochen Zhang, the president of FinTech4Good and also the host of the Security Token and Stablecoins Roundtable.

Following the New York Department of Financial Services (NYDFS)’s approval of two new Stablecoins, GUSD and PAX, experts from all over the world joined a lasting debate on several issues around this topic. During the meeting, Reggie Middleton from Veritaseum, challenged the validity of GUSD, PAX and any fiat backed stablecoins, “Will they solve price volatility or cause more problems?” Comparing fiat backed stablecoins, real estate backed stablecoins, asset backed stablecoins and crypto asset backed stablecoins, he argued that asset backed stablecoins, especially gold backed stablecoins are the future to stablilize the market. This was again challenged by other experts focusing on the differences in market pain points that each stablecoin aims to address. “As an investor, fiat backed stablecoin will make the most sense to simply the whole chain in our investment” said Manju Nishshanka, the CEO of KRMG Capital. Gregory Strong from DLx law said that the fiat-backed stablecoins provides a more effective vehicle for individuals and organizations to make cross-border money transactions. Despite the future potentiality, stablecoins are not without challenges. Only 2 stablecoins (GUSD and PAX) have been approved so far. No stablecoins have been licensed in Europe, said Udi Algrassi, CEO of the Spot Capital Markets. It will take time for regulators from all over the world to provide clear guidance on stablecoin related matters.

Another topic covered in the meeting is security tokens. “The issuance of security tokens has to comply with the existing security laws which makes it more legally available for many innovative startups.” said Gary Ross, an attorney at Ross & Shulga. Oscar Jofre, CEO of KoreConX, believed that the security tokens combined the merits of crowdfunding and tokenization. “The emerge of security tokens will conduce to build a transparent ecosystem for investors and investees across countries in a much more cost-effective way, which will benefit the entire financial market.” There were also concerns about the methodological issues around security tokens. Till now, there are not wide accepted valuation models which can be applied to security tokens which increases risks in investing in this new asset class.

On October 10th, 2018, FinTech4Good will organize another Security Token and Stablecoins Roundtable in Washington DC with a focus on Responsible Blockchain Innovations. Insights drew from this and next meeting will be reflected in the October Responsible Blockchain Report which will be published in early November 2018.

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