ST-20

Security Token Standard

Polymath is upgrading the existing capital markets infrastructure to take advantage of blockchain technology’s benefits: seamless capital formation; instantaneous settlement for unique, unforgeable assets; negligible trading fees; and countless others.

Polymath

There needs to be a standard for security tokens.

In order to make this upgrade possible, we believe there needs to be a standard for security tokens that utilizes these benefits while satisfying regulations. With a standard in place, security token issuers, investors, exchanges, wallets, custody providers, and regulators can become comfortable with this technology, interoperability becomes easier, and adoption can be widespread. Similar to how the ERC-20 standard enabled the boom in utility tokens on the Ethereum blockchain, there needs to be a standard for security tokens.

The standard we have built at Polymath is ST-20. ST-20 is an extension of ERC-20 that introduces the ability to restrict transfers of blockchain tokens. ERC-20 tokens do not have any transfer restrictions and therefore can be freely traded by anyone. This is fine for so-called utility tokens. When dealing with securities, however, all securities holders must be KYC/AML verified, and there are many additional restrictions on the distribution and trading of securities. ST-20 is the solution to this problem. It allows security token issuers to maintain regulatory compliance through transfer restrictions. And beneficially, it is backward compatible with ERC-20 making it interoperable with much of the existing blockchain infrastructure available today.

Polymath

Security tokens must be regulatory compliant.

In the next step for mass adoption, ST-20 has been formalized as an Ethereum Request for Comment to be merged with the Ethereum codebase. ERC-1400 - The Security Token Standard has received incredible community support and feedback, and we are looking forward to its continued evolution.

To learn more and how you can contribute, please visit the official ERC1400 - The Security Token Standard site.

The Security Token Standard

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