Securities Exchange Platform: What Is It and Why Is It Needed?
The term securities exchange is not brand-new due to being used alongside stocks exchange term. However, the securities exchange platform can still be considered pretty new, and probably the least discussed term. You might have heard it from us, Polymath, tZero, or perhaps someone else, but there are not that many people talking about it yet.
What Is a Security Token?
Before we can explain securities exchange meaning and need, you would have to know what are securities and security tokens. We already had an article “What Are Security Tokens?”, that you can read and then come back to this one. If you do not want to jump between articles, we will try to explain it in short beforehand.
Securities are tradable financial assets — bonds, debts, shares (stocks), warrants, etc. They are used to raise money for the project with returns in a shape of dividends, interest rates, the share of profit, or something alike. Many new blockchain projects choose to use a cryptographic token that represents this kind of contract between the company and the investor. It is called a security token.
What Is a Securities Exchange?
It is a regulation-compliant platform that, in a way, brings an investor and the company together. It makes the buy and sell process of securities easier both for the holder and the company. The list of currently functioning securities exchanges is still short, but several projects such as our ROKKEX Securities Exchange are on the way. The demand is growing with the expanding list of security tokens and their sales.
Why Do We Need Security Exchange Platforms?
The key reasons for the existence of such a platform are as follows:
- Improve accessibility
- Grow liquidity
- Ease the process
We have already mentioned in our previous article, that there are more than 100 security tokens created already, but they lack liquidity. Many do not reach the needed number of investors or are not trusted enough.
Securities exchange platforms being regulated already would check the project for you. The listed securities are inspected if they are compliant with the needed regulations, accessible for certain countries, licensed, etc. To put it simply, you do not need to worry if the project can be trusted anymore, simply decide what project you would like to invest in.
The matching engines help you choose projects that are accessible and complies with regulations required for your area. Also, passing one platform’s KYC procedures saves time and makes the process easier, especially if you would like to get tokens of more than one project.
The growth of accessibility, visibility, and trust of the token brings liquidity. Visible and liquid token brings success to the project and benefits the investor. Thus, securities exchanges are a vital part of security token ecosystems.
ROKKEX Securities Exchange is already planned for 2020. We invite you to join us in building it by investing in our Security Token Offering. We have talked about our STO and ROKKEX Security Token few times already, so feel free to check our previous articles or contacts us on social media if you have any unanswered questions.
At ROKKEX, we take security extremely seriously, and our crypto exchange is built on ‘Security First’ principle. We want to share our expertise with the broader public for the world to become happy, safe, and wise.
If you have any ideas and suggestions, contact us at