WATCH: The State of Security Tokens in Asia

CoinDesk’s Christine Kim sat down with Dalma Capital Management CEO Zachary Cefaratti,
Director of Digital Assets at R3 Antony Lewis, and Philip Pang, the Associate Director at Colliers International this past week for a panel discussion entitled the “State of Security Tokens in Asia.”

R3’s Lewis kicked off the event, speaking to the Invest: Asia 2019 attendees on the current market trends in security issuance. Lewis said ecosystem readiness, regulatory harmonization, and the need for experienced investors stand at the top of the heap of concerns.

During the conversation, Kim covered topics ranging from why security tokens to what security token offerings are finding high yield.

Speaking on security token offerings, Dalma Capital’s Cefaratti said companies are more often than not shipping low-quality products with security token offerings.

“Why would you do a security token? There’s an adverse selection problem… Unfortunately, we get approached as an investment bank by so many companies that want us to do a security token of their not very high-quality asset and think that its gonna be a solution to magically raise them a bunch of money and get a bunch of liquidity,” he said.

Colliers Internationals’ Pang said Asia real estate firms are mostly seeing security tokens in high yield assets like apartment complexes or industrial warehousing.

Wrapping up the conversation, Cefaratti and Lewis spoke on the role of security token custodianship.

“There are some situations where you can not legally self-custody and you need to for because of regulatory reasons pay a third-party custodian,” Lewis said.

“The marginal cost of providing custody of an additional dollar of assets is zero. It’s next to zero,” Cefaratti responded. “Marginal cost determines the marginal price. Yes, we will need [digital asset custodians], but it won’t be a very profitable business.”

Dalma Capital CEO Zachary Cefaratti and R3’s Antony Lewis as Invest: Asia 2019 via CoinDesk archives