Up until recently, blockchain projects mainly consisted of various cryptocurrencies and looked more like speculative mania than a financial revolution. A recent transition from speculative utility tokens to asset-backed and regulated security tokens looks ready to make a big change.
The nascent but rapidly-growing security token economy, in which Israel is poised to be a major player, offers a host of advantages for securities trading, including enhanced liquidity, speed, divisibility, and scalability. And yet, in order for these promises to be fulfilled, the blockchain ecosystem first needs to solve some major problems.
Perhaps the greatest of these issues is money laundering. Cryptocurrencies have generally been associated with this phenomena due to their borderless, opaque nature. The ability to move a liquid asset around the world while avoiding any regulatory oversight is a dream come true for anyone in need of a “washing machine.” A large number of illicit businesses began to accept cryptocurrency as a means of payment, not to genuinely increase their sales, but with a more sinister goal of creating legitimate sources of funds that came from illegal activities, including hacking, ransom, and drug trafficking.
While it might not seem like the most significant problem to the general public, tax evasion is one of the biggest problems hampering global adoption of blockchain technology. Using cryptocurrency for tax evasion is child’s play to those familiar with masking cryptocurrency transactions. A potential evader can get paid into a private digital wallet and then liquidate