In July last year, BTG Pactual already announced they would be utilizing Tezos for STO's (Security Token Offerings). Back then, they were in the process of starting up a real estate token called ReitBZ on Ethereum. At this point of time, $10 million worth of value in ReitBZ has been issued on Ethereum. Andre Portilho, head of digital assets at BTG Pactual, told Cointelegraph that $5 million of that amount, will now be moved to Tezos. Another $2.5 million that was raised in fiat will also be issued on Tezos. BTG Pactual doesn't want to be tied to just one blockchain and is looking to explore "other options, other blockchains that might serve better the pieces of tokenization and issuing tokens that represent real assets."
What are STO's?
STO is short for Security Token Offering. STO's are tokenized assets. This means that value of the asset, is represented by tokens that are registered on a blockchain. These Tokens are classified as a "Security", which are assets that are strictly regulated. The biggest use-case for STO's is the tokenization of real estate.
Real estate has value. To tokenize that a piece of real estate, you take the actual value, lets say 1 million dollars, and divide it into tokens. Lets say 100.000 tokens of 10 dollar. The amount of tokens is fixated on chain, and from the moment the STO is launched, the tokens can be traded. If demand rises, so does the value of the tokens. If demand drops, so does the value of the token. People buying the tokens will have to do some research on the property and compare prices with other properties, just like anyone would do for any investment in real estate. Don't expect the value swings you see in cryptocurrencies. STO value will probably follow the same trend as its real world counterparts. What makes STO's interesting is the fact that these investments are relatively safe, but generate income. (Like rental income in real estate.) What makes STO's revolutionizing, is the fact that in traditional real estate investments, not just everyone can participate due to the fact that traditionally, you can't buy small pieces of real estate. So people with limited funds can't commonly invest in real estate. Which is a pity, since it is considered to be quite a safe investment. And as mentioned, real estate is being rented, which provides passive income. This income will be distributed to STO holders. So for people with some long-term savings this mght be an option. Banks give no interest over your savings. A well picked real estate STO might be a great alternative. And in the form of STO, it is a lot more accessible since people with smaller budgets to invest, can now take part in the real estate market too. Investments can start somewhere in the range of $100 to $250.
So STO's should make investing in traditional assets like real estate, way more accessible.