Abstract:

The financial industry was the first to perceive a huge potential in the blockchain technology. With the emergence of blockchain and smart contracts, a new method of raising capital for business projects has developed: digital tokens. Issuing tokens, through Initial Coin Offering (ICO), has become a popular method of financing projects, mainly technological ones. As a result of irregularities and frauds related to this, there was a loss of investor confidence and the ICO market collapsed. Hence, there is the emergence of Security Token Offering (STO). This innovative business model has an opportunity to revolutionize the financial market, while offering to its participants new opportunities to raise capital for startups and, on the other hand, new opportunities for investors. The aim of this article is to identify the factors that have an impact the development of the market of Security Token Offering in a global perspective and to create a model of interrelations between these factors. On the basis of the goal formulated in this way, a thesis was put forward that the STO market has a large growth potential; however, there are a number of factors that determine its development. The identification of those factors that have an impact on the development of the market under examination is based on an empirical analysis of the global STO market and an evaluation of its potential. Those challenges that face this market are also identified.