on the crypto
Securitize, a company that deals with digital security through a blockchain-based transfer system, has delivered a royalty payment to the owners of one of its security tokens.
Securitize becomes a paying agent as well as a transfer agent
With the distribution of a "royalty payment" to Lottery.com security token holders on Friday of last week, Securitize claims to have achieved a record high in securities by becoming the first company in its category, which is a transfer agent that distributes payments to token holders entirely on a blockchain.
Transfer agents maintain and update the securities ownership records and distribute payments, such as dividends or shareholder interests (in the case of Lottery.com, a portion of the lottery revenue) to the owners.
But transfer agents are not always "paying agents", that is, those who actually deliver those payments to shareholders. Securitize essentially claims to have become a payment agent thanks to the new features implemented in its system.
A system to take advantage of all the advantages of security tokens
Carlos Domingo, Securitize CEO, told the media that his smart-contract-based payment system represents the "future" for shareholder payments. "With this system, we can basically make instant payments," he said, because the token ownership records are updated in real time and can seamlessly integrate with the means of making the payments.
"It's a combination of the two advantages of security tokens that make these processes much more efficient than the traditional way of managing them," he said. Domingo pointed out that the stock market is subject to expensive payout schemes which, in his view, allow transfer agents such as Computershare to profit from dividends which they should, on the contrary, distribute.
Such inefficiencies are impossible in the Securitize model, he said. The new model therefore proves functional and avant-garde with respect to those already integrated in the ecosystem.
Payment in USDC greatly simplified the payment process
During the payment of Lottery.com, Securitize found that over half of the token holders selected to receive payments were in the USDC stablecoin database.
This made "the whole process much more efficient and simplified than sending an ACH, cable transfer or bank transfer," said Domingo. Securitize is looking to extend its royalty delivery service, also involving the company's real estate partners, Domingo said.
Securitize is one of the few encryption-focused transfer agents registered with the United States Securities and Exchange Commission (SEC), along with Harbor (later acquired by BitGo) and TokenSoft.
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