The issue of traditional securities is a time-consuming and expensive process involving many different parties. This is largely due to the fact that these assets require paper-based processes.
Non-tradable capital market products are an alternative used mainly by crowd investing platforms. The downside of this solution is the limited transferability of these assets in comparison with securities.
With securities, a paper-based certificate must be stored with a central securities depository (CSD) via a custodian bank so that investors can buy a security. The CSD, together with the custodian banks involved, ensures that the data on a security remains unchanged - including the current holders.
Digital securities replace this paper-based and centralized process with a decentralized infrastructure based on the Ethereum blockchain. This infrastructure serves as a secure register in which the holders of securities are stored. The immutability of the data is technically ensured in this case. This means an enormous scalable cost advantage compared to centralized systems.