Blockchain-Based Equity and STOs: Towards a Liquid Market for SME Financing?

摘要

Security Token Offerings (STOs) are a very recent phenomenon that has started to replace the Initial Coin Offering (ICO) one for financing companies through blockchain networks. Contrary to ICOs, which are based on “utility tokens”, STOs issue “security tokens” that are likely to achieve revenues in the same way that bonds or shares do. However, because they utilize the blockchain network, they are expected to benefit from lower intermediary and transaction costs. The objective of this paper is to examine, for the first time in financial research, to what extent this nascent market can become a liquid one, adapted for small and medium-sized enterprises (SMEs). To address this still unexplored issue, we proceed in two stages. First, we develop the technical characteristics of security tokens. Then, we analyze the trading volumes of a very few ones, although it has proved difficult to conduct a relevant empirical analysis. Our results are that, as for ICOs, the technical nature of security tokens can greatly facilitate their listing and exchange. However, there are significant disparities in their use and, for the moment, most of them remain locked in the wallet of so-called accredited investors. As a result, the potential of the blockchain-based equity market is still uncertain: STOs are likely to represent a growing and liquid alternative to IPOs, private equity and crowd funding to finance SMEs. Nevertheless, the liquidity of their digital assets strongly depends on the quality of their issuers and on the existence of specialized trading platforms.