- Yesterday, according to Ta Kung Pao, Tai Chi Capital announced the launch of Hong Kong’s first real estate fund security token offering (STO) for “professional investors.” The fundraising target is 100 million yuan.
- "License is not about alcohol. Crypto-assets such as BTC and ETH are just the first step, and the mystery behind it is the entire financial market." " Before compliance, we saw more industries emerging. are native projects such as NFT and DeFi. After compliance, RWA has become a track worthy of long-term attention, including security tokens, STO, etc. The market value of the former is currently equivalent to about half of Apple’s market value, while the latter represents It holds the potential of the entire financial market.” - - Hedy Bi, Ouke Cloud Chain Research Institute, at the Bund Conference on September 9
Although affected by macroeconomic factors such as the epidemic, Hong Kong, once called one of the "New York Times" cities by the New York Times, may have declined in its status as an international financial center in recent years. However, the Hong Kong government remains firm in its determination to maintain this status. Web3 is one of their main tracks for "overtaking in corners" since last year. As we said in the previous article, security tokens are not just a technical method, but also represent the potential of reactivating the entire financial market .
"The drunkard's intention is not to drink"
The core function of finance is to provide financial support and financing channels for the real economy. The essence is to inject blood into the real economy. To truly provide financing support, it is necessary to allow funds to flow, and to keep the intermediate links open and reduce transaction friction, so that enough blood can be transferred in a timely manner .
However, there are still some challenges in the current financial system that still need to be solved. For example, high financing costs are a problem that cannot be ignored. Tokenization can greatly improve liquidity and solve the problem of financing difficulties. In particular, STO, which is similar to a traditional initial public offering (IPO), is a typical application case solved by tokenization technology in terms of issuance.
This also means that with the support of the China Securities Regulatory Commission’s compliance framework, tokenization technology will become the button for reactivating the financial market .
The Hong Kong Securities Regulatory Commission supports this field and actively promotes the practice and implementation of STO in Hong Kong. As an important milestone, the Hong Kong SAR government successfully issued an HKD800 million tokenized green bond, which is the world’s first tokenized green security issued by a government.
The new regulations released in June this year are just the beginning , targeting the trading of virtual assets such as Bitcoin (BTC), Ethereum (ETH) and other crypto assets with higher market capitalization. What is truly eye-catching is the secondary activation of the financial market brought about by Web3 technology.
Starting from "professional investors", it is expected to be listed and traded on the Hong Kong Compliance Exchange in the future, and the circulation from the primary market to the secondary market will also be completed on the chain. STO is not limited to the public issuance of stocks and bonds, but can also be used for the management of private placement issuance to improve its efficiency and transparency. There is a better choice between the convenience of a private placement but low transparency and the high transparency but high cost of a public offering.
STO is not the first practical application
STO is no longer an innovative term. 17.1 billion US dollars, according to STOMarket statistics, this is the amount of funds that have been raised through STO, and this is only the beginning of this market. The STO launched by Taiji Capital this time is not the first practical application in Hong Kong.
Source: STO Market
As early as July 26, 2022, OSL Digital Securities Limited (OSGL), together with Animoca Brands, United Financial Group, China Fuqiang Financial Group, etc., successfully issued security tokens with US dollar bonds as the underlying assets. It is the first STO officially allowed by Hong Kong regulators, opening the door to the market for Hong Kong licensed digital asset brokers to issue and distribute tokenized securities.
From US dollar bonds to real estate, we can see the Hong Kong market’s continuous attempts and exploration of STO. As a financial asset with poor liquidity and high transaction friction, the real estate industry can lower the threshold for investment and exit through digital securitization, making it easier for investors to buy, sell and hold, and improving market liquidity and transaction efficiency. .
Not only Hong Kong, the STO market is booming around the world, and various regions are actively exploring the application fields of STO. St. Regis Aspen, a luxury hotel in Colorado, launched the first project to attempt to tokenize real estate ownership, successfully raising $18 million in October 2018. This marks the real estate industry’s first attempt at an STO. Similar to Hong Kong regulation, U.S. investors are subject to U.S. securities laws and regulations.
Yue Weiman, Chief Executive of the Hong Kong Monetary Authority, delivered a keynote speech at the Financial Markets Summit on September 4, 2023. During the meeting, Web3 underlying technologies such as blockchain technology were mentioned to promote the digitalization process of Hong Kong as one of the international financial centers.
From the STO case, we can also use Yu Weiwen's theme to describe it, " The Vibe is Back ".
Note: The news events in this article are all from public media sources.