Polymath (POLY) Develops A Standard For Security Tokens Emission And Trading

The Polymath platform launches a trial peer-to-peer trade of security tokens on a decentralized exchange. The company decided to upgrade the existing infrastructure in order to take advantage of the benefits that the blockchain technology can offer. Representatives of the company announced the development of a standard for security tokens, which would comply with all rules regarding securities:

“With a standard in place, security token issuers, investors, exchanges, wallets, custody providers, and regulators can become comfortable with this technology, interoperability becomes easier, and adoption can be widespread. Similar to how the ERC-20 standard enabled the boom in utility tokens on the Ethereum blockchain, there needs to be a standard for security tokens.”

The standard developed by Polymath is called ST-20. This is an ERC-20 extension that provides the ability of restricting the transfers of tokens. The ERC-20 has no transfer restrictions and, therefore, they are free to be traded by anyone.

All holders of securities must undergo a KYC / AML compliance procedure, there are also more restrictions existing regarding securities’ trading. ST-20 could become a solution. It would allow issuers of security tokens to comply with regulatory requirements.

Image courtesy of Polymath Facebook