First STO issued in Austria
Another milestone not only for us as a company, but also for the development of the financial market — our TAX Token is Austria’s first issued Security Token. This was announced in a press conference on April 11th. As a modern financial product, a security token with its flexibility opens up completely new possibilities for corporate financing. Together with our technology partner CONDA, we presented the world’s first legally secured decentralized network protocol for tokenized security and equity offerings. Find first-hand information in the press section of our website.
“We opted this new financial instrument as part of our corporate financing for a number of reasons. Compared to a traditional investment round, such as the issue of shares or venture capital, a security token can appeal to a broad mass similar to crowdfunding and make the offer flexible,” explains our CEO Florian Wimmer. In contrast to a classic security, the security token is a flexible “smart contract” that can be defined within a wide range of options by the issuer in terms of its type and scope due to its technological nature. In general, however, one speaks of a classic financial product that is transparently securitized on a block chain. As with equity, this can be actual shares in a company, but also revenue shares, bonds or much more. In this case, our issued Security Token (TAX Token) guarantees a share of the companies revenue defined as a profit participation right and represents an extraordinary financial instrument.
Financial innovation in Austria
“The real innovation about the security token is the simplicity of the design, the high level of security and the rapid technological implementation for both sides,” says Paul Pöltner of CONDA AG. CONDA is responsible for the technological infrastructure and intends to establish a standard for STOs in the medium term. The Austrian Fintech company used the infrastructure of the in-house CRWD network to implement the STO. Together with CONDA, we thus have a pioneering role in Austria and have raised the possibilities of corporate financing to the next level through the use of blockchain technology. “The hard work as well as the numerous coordination rounds with specialised lawyers and European regulators have paid off, because last year CONDA launched the world’s first technical solution for the simple and effortless issuing of security tokens”, Paul Pöltner is pleased about the success.
Flexibility and legal security for companies and investors
Especially last year, ICOs (Initial Coin Offerings) boomed as an alternative financing option using blockchain technology. But the concept had many weaknesses in the area of security. Security token offerings solve these problems by creating a digital asset on top of comprehensive regulations and legally securitizing existing financial instruments on the blockchain. Security Token Offerings combine the advantages of traditional corporate financing through the issue of securities with blockchain technology and represent an innovative and cost-effective form of project and corporate financing, especially for start-ups and SMEs. “While 2017 was the year of the ICOs and 2018 the bear market brought the overheated expectations back to reality in pain, 2019 is emerging as the year of the STO,” said Dr. Christoph Kletzer, Senior Lecturer at King’s College London and member of the advisory board of the Digital Asset Association Austria (DAAA). According to Kletzer, three of the many advantages can be highlighted: The increased liquidity also for smaller companies, the interoperability of asset classes and a possible innovation in the structure of securitised rights.
Disclaimer
Please note that as most forms of investment, STOs carry a risk. Our STO is a “Private Offering”, therefore no details of the STO’s terms may be made public. If serious interest to invest exists, please contact our management at florian@blockpit.io.
