What Are Digital Securities And How Are They Revolutionizing The World Of Investing?

Digital securities have completely changed the way people invest and as a result, it has become very important for an investor, even if they are just starting out, to understand what are digital securities and how they are extremely helpful.

If you are curious about digital securities, read on –

What exactly are digital securities?

Digital Securities are just another name for security tokens. These are digitalized forms of financial securities like stocks, bonds, funds, and other similar assets. They are built on blockchain technology and are highly liquid and provide increased accessibility to the various retail investors that are present in the market today. To give you more clarity, if you bought a stock, for example, in the older days, you would get a physical certificate stating the same. However, with the help of digital securities, buying equities is now paperless and requires fewer steps to buy and sell the different available securities.

How are these digital securities revolutionizing the way people invest?

• It democratizes the capital markets –

Adding real estate to your investment portfolio before digital securities were introduced, meant using up a huge capital and undergoing the tiresome process of acquiring the property physically. This essentially meant that only the rich could access the real estate market. However, with the help of digital securities, it is now possible to invest in real estate by buying the digital and fractionalized portions of such properties through a brokerage or by investing in REITs. The same is applicable to all adjacent industries and financial assets that are available and open to investors.

• .It lowers the transaction cost -

Digital Securities remove the need for any costly infrastructure that is needed to keep a record of the transactions. As all the required processes of maintaining the records are carried out online automatically, the need for an intermediary agency to do the same is removed. This brings down the cost of transactions for all involving parties, the brokers, issuers, and even the investors.

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