Conclusive insights: The Global Digital Securities Ecosystem Study

The ecosystem surrounding digital securities is in its very early days and it’s evolving faster than ever before. The growth has led to an ever-increasing amount of companies starting work with the “next big thing in DLT”, a stellar development for the whole industry, yet the pace leads to a lot of intransparency within the different sectors. — Authors: Paul Claudius, Carl Bruns, Philipp Sandner

BlockState and Frankfurt School Blockchain Center tackled this intransparency and released the most comprehensive study about Security Tokens up to date. The research brought to light how Secondary Markets slow down the ecosystem, the way issuance providers struggle with disclosing information and the massive attention digital securities are already getting from traditional banks and investors alike. This post aims to inform you about both: The most interesting findings and our research process, starting off with the cornerstone of the ecosystem.

Infrastructure providers

Most remarkably we were able to find out that:

  • Every company except one offers an operational infrastructure
  • 11 companies come from the USA, 9 from Europe, 2 from Asia
  • Public and Private ledgers are both seeing application

Key findings

Verfication algorithms determine how the network makes sure that new data being added is correct and that existing data can’t be tempered with. Projects are using different approaches to solve different problems. Many companies are putting their trust into Proof of Stake instead of Proof of work, which is heavily favoured in traditional crypto projects. If you want to find out how the mechanisms work and how they differ from one-another, here’s an article that describes it in a simplistic manner.

Types of verification algorithms

Private solutions are on the rise in this category. As the demand from corporate clients increases the need for proprietary solutions increases with it, as this solution focuses on privacy and scalability.

Research process

Due to the advanced state of this category the whole research went very straight-forward in general. Elaborate whitepapers enabled us to gather data in an aggregated, verfied manner, so we didn’t have to rely on secondary sources in general.

Issuance providers

A few key-facts before we elaborate:

  • Issuance providers again predominantly come from the US (17 companies)
  • Lots of information is undisclosed
  • Ethereum is the most commonly used infrastructure

Key findings

How many companies executed which amount of STOs?

In line with our previous STO study Equity is being tokenised the most, followed by Real Estate. Debt and alternativeassets follow, further displaying the value Security Tokens are already adding to the traditional economy.

Research process


What we found the most exciting:

  • The USA dominate this category like no other with 42 companies
  • 2nd place goes to German with just 6 investors
  • Investment firms tend to be smaller enterprises with max. 10 employees

Key findings

Distribution of investors

Yet individual investment companies rarely invest in more than 1 Security Token related firm. Only 3 companies invested into 2 projects and even further just 2 times could we identify investors investing money into 3 businesses related to the ecosystem. So while investors represent a fairly large part of the ecosystem most of them are one-timers.

Research process

Secondary Markets

Most notably secondary markets are:

  • Largely not operational
  • Geographically spread out like no other category
  • Offering a wide range of additional services

Key findings

The markets concepts however still brought to light quite a few interesting pin-points. 89% of the trading solutions are going to target retail investors, equally opening up the markets to the masses as one could observe in the crypto ecosystem.

Target groups of secondary markets

Research process

This led us to find many project who sort of claimed to be operational yet only offered demo trading or were still working on a functional version behind closed doors. Research was tedious but relatively conclusive, which enabled us to clear up any intransparency surrounding the secondary markets.


What we found the most interesting:

  • 24% of banks are still developing their services
  • Ethereum and r3 corda are used most frequently
  • Banks mostly tokenise debt

Key findings

  • State owned banks,
  • coporate banks,
  • investment banks,
  • and commercial banks

equally worked with the tech, using different features to their advantage.

Types of banks

The analysis of activities led to tokenisation being by far most popular executed action. A few banks offer issuance services, others have successfully tokenised securities to transfer them efficiently. Apart from that, Custody and Settlement services are being offered exclusively by corporate banks.

Research process

In the introduction we explained how we also included banks who only “interacted” with digital securities. We decided that this classification was needed as our research showed that some banks for example are limiting their activities to one-time transfers of digital securities. Activities like those do count as fairly important and are definitely related to digital securities, yet aren’t connected to any kind of offered service.


Apart from the future, it’s great to see how far the ecosystem evolved already: 213 companies are shaping the industry as of today according to our research and more are definitely to come. Successes have been made, with regulators and traditional financial institutes alike. Security Tokens are here to stay and BlockState is ready to be a part of the journey.


Do you want to learn more about how blockchain will change our world?

  • Blockchain knowledge: We wrote a Medium article on how to acquire the necessary blockchain knowledge within a workload of 10 working days.
  • Our two blockchain books: We have edited two books on how blockchain will change our society (Amazon link) in general and the everything related to finance (Amazon link) in particular. Both books are available in print and for Kindle — currently in German and soon in English. The authors have been more than 20 well-known blockchain experts in startups, corporations and the government from Germany, Austria, Switzerland and Liechtenstein — all contributing their expertise to these two books.
Our two books: the first one on blockchain and the society and the second one on blockchain and finance


Carl Bruns has more than 10 years of operational experience founding, supporting and developing digital ventures in real estate, retail banking and publishing. After building the online marketing agency ABCD agency, he joined the Swiss security token provider BlockState as CMO, where he developed a deep understanding of the security token ecosystem.

Prof. Dr. Philipp Sandner has founded the Frankfurt School Blockchain Center (FSBC). In 2018 and in 2019, he was ranked as one of the “top 30” economists by the Frankfurter Allgemeine Zeitung (FAZ), a major newspaper in Germany. Further, he belonged to the “Top 40 under 40” — a ranking by the German business magazine Capital. Since 2017, he is member of the FinTech Council of the Federal Ministry of Finance in Germany. The expertise of Prof. Sandner includes blockchain technology in general, crypto assets such as Bitcoin and Ethereum, the digital programmable Euro, tokenization of assets and rights and digital identity. You can contact him via mail ( via LinkedIn or follow him on Twitter (@philippsandner).

Professor | Lecturer | Author | Investor | Frankfurt School Blockchain Center