What is Security Token Offers (STO)

What is Security Token Offers (STO)

2023-03-02

Security Token Offers (STO) is a form of fundraising that uses blockchain technology to issue tokens that represent ownership of an underlying asset or security. These tokens are backed by real assets, such as stocks, bonds, commodities or real estate, and are designed taking into account securities regulations.

STO is similar to Initial Coin Offerings (ICO) in that they are both used to raise capital for a project or business. However, STOs are considered safer and more transparent than ICOs, as they are subject to regulation and supervision in the field of securities.

Unlike traditional securities offerings, STOs are issued in blockchain networks, which provides global access to investment opportunities and the ability to trade these assets around the clock. In addition, STOs can be fractional, which allows investors to acquire small shares of the asset, which can help democratize access to investment opportunities.