Hoskinson Partners with Polymath Blockchain to Launch Security Token

Hoskinson Partners with Polymath Blockchain to Launch Security Token

May 14, 2019

The founder of Cardano, Charles Hoskinson is about to make a new partnership with Polymath as the co-architect of ‘Polymesh’, a blockchain that focuses on becoming a layer one for security tokens.

According to the co-founder of Polymath, the blockchain is looking to change how different businesses issue securities and track equity.

Trevor Koverko went on to say:

“[Polymesh] is purpose-built, since security tokens have unique needs and characteristics that demand a specific foundation. Ultimately, we want to marry issuers, investors and regulators together, which is what the layer one architecture is designed to do.”

This system comes at a good time as utility tokens and other cryptocurrencies considered commodities, like the leading cryptocurrency, still fall into a regulatory grey area based on the lack of clear guidance from the US Securities and Exchange Commission.

Even so, the regulations that surround securities or equity are already established. In building such a system is more a matter of compliance around tokenisation and the treatment of data rather than challenging the classification of these digital assets.

But if the Polymesh blockchain makes some moves, then there is potential there for it to serve as a more regulated alternative to fundraising through initial coin offerings. However, Hoskinson suggests Polymesh has its eyes set on more than just the crypto space.

“There are quadrillions of dollars of financial securities, and building a blockchain to secure them is an incredibly exciting task.”

Polymath currently operates on Ethereum but it is working on deploying its own blockchain because of limitations of the network.

Ethereum is engineered in such a way that it is globally hard to censor transactions. As pointed out by Hoskinson though, actions like freezing or reversing transactions are vital for a functional system that manages securities.

Koverko highlighted:

“All the best features of Ethereum are actually bugs for security tokens. We see a coming stampede of security tokens, but it’s more complicated than the first wave of utility coins due to all the regulations, compliance issues, and data.”

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