PricewaterhouseCoopers (PwC) Strategy Switzerland, in collaboration with The Crypto Valley Association, have released their Spring 2020 edition of the ICO/STO Report, providing a perspective on developments within the initial coin offering (ICO) and security token offering (STO) markets.
6th ICO / STO Report, by @PwC @strategyand in cooperation with the Crypto Valley Association. Global crypto fundraising: Switzerland as an attractive hub and tokenisation centre@DanielDiemers @_GDS77_ @HenriArslanian https://t.co/a8RG8jGk1s
— Crypto Valley (@thecryptovalley) January 30, 2020
Condensed into an easy-to-read 12 pages with helpful graphics and tables, the report takes a snapshot of the industry in a number of key areas including the volume of offerings, the leading hubs for projects, and the number of governments, corporations and banks accessing blockchain or distributed ledger technology (DLT) to issue securities. The rise of initial exchange offerings (IEOs) during 2019 is also covered.
Leading Crypto Hubs
While the findings confirm the overall volume of tokens has shown little movement since mid-2019, the first ten months of last year saw more than 380 token offerings completed which raised a total of around USD$4.1 billion.
The relative share of IEOs, in terms of overall offerings completed, increased significantly and showed strong momentum throughout the year with the Bitfinex IEO being the largest performer, generating USD$1 billion. Although not covered in depth, the report editors are bullish on the institutional infrastructure and emerging regulatory framework around token offerings and believe this “…will further drive market traction of IEOs.”
Examples of bond, loan, and commodity tokenisations from organisations – such as the Austrian Government, World Bank, Daimler, and Bank of China – are quoted to illustrate the growing trend of traditional entities embarking upon directly-issued security token offerings.
The U.S.A., Singapore and Hong Kong are identified as continually delivering on token projects and results from 2018-19 indicate “…their strong positioning in [the] token offering ecosystem.” However, less prominent geographical locations – the British Virgin Islands and Cayman Island – also faired well due to hosting the large scale token offerings of EOS and Telegram.
In Europe, Estonia continues to deliver in token offerings despite its relatively small financial markets while Switzerland and the U.K. are described as the “…leading hubs in the crypto offering sphere…” in the region.
Tokenisation companies – which the likes of TrustToken in the U.S.A and Smart Valor in Switzerland typify – are discussed as bringing “…increased liquidity, faster settlement, lowered costs and bolstered risk management” to issuers which in turn makes the “…assets accessible to small retail investors.”