StartEngine, an equity crowdfunding platform announces a new token standard, the ERC1450 standard on Ethereum that will enable creating digital stock certificates. The SEC-registered entities could enact the new standard, bringing up the much-needed option for compliant tokenized securities.
The CEO of StartEngine, Howard Marks, broke the news that the crowdfunding platform will soon be rolling out the ERC1450 standard. Currently, the crypto-space is plagued with how to move existing assets onto blockchain-based systems. Real estate and other financial securities alone account for trillions of dollars worth of value. Since SEC heavily regulates all securities, each transaction of securities requires a registered broker-dealer as an intermediary. The question of the hour arises here precisely, how can blockchain bridge regulations with transparent decentralization?
ERC-1450 is one of the first token standards for securities on Ethereum: a standard for creating digital stock certificates. The announcement states that any ERC-1450 token will require a registered transfer agent to create and process the tokenized securities.
Ownership could be transferred either directly from buyer to seller or through an SEC-registered broker-dealer. Obviously, the tokenized securities under ERC-1450 will be completely transparent and will be easily trackable on Ethereum’s blockchain. Making the new standard a significant game-changer for the fintech world.
StartEngine will involve ERC-1450 standard to list tokenized stocks and equity on their crowdfunding platform. With its aid, the platform will issue tens of thousands of tokenized securities. The standard currently has been issued to all 3,500 StartEngine shareholders and the 165 eligible companies that use StartEngine Secure will probably be listed using the ERC-1450 standard.
While other Ethereum contributor has had their own standards for tokenized securities, StartEngine is the first firm to release their own standard that is currently in use.