Cryptocurrency investor and trader
The concept of asset tokenization is still in its formative state, as companies are just coming to terms with the idea of capitalizing on blockchains to distribute shares and assets to interested investors. While this is a given, the concept is looking ever more likely to hit the ground running in 2020. This eventuality is bound to contribute to the potency of STOs as a fundraising mechanism for startups and established companies.
Experts in this field have begun to put plans into motion in preparation for the inevitable explosion of asset tokenization and STO. One of such individuals is Marvin Steinberg, Founder and CEO of Steinberg Invest and one of the leading STO experts in the industry.
In a recent interview session, I and Steinberg got talking about his take on the subject matter and how his company is leading the charge in a nascent STO industry. Here are some of the highlights from the conversation I had with Marvin Steinberg.
Can you tell us a bit about your background as an entrepreneur?
Marvin: I used to play ping-pong professionally until an injury forced me to reinvent myself and discover strengths, I never thought I had. At this point, I forayed into the energy industry, where I discovered the potentials of combining marketing skills and IT to generate unprecedented results. Before long, I grew my energy company from the ground up, turned it into a successful brand, and eventually sold it for several millions of Euros. After my successful stint in the energy sector, I decided to explore various ways I can help other companies to generate funds and build self-sustaining brands. I started out in the ICO industry. But owing to the apparent frailties of the fundraising mechanism, I decided to switch to a more viable and legally sound means of securing funds, which is STO.
How did you find yourself at the heart of the blockchain industry, seeing that you spent most of your early years as an entrepreneur in the energy sector?
Marvin: Well, my first encounter with crypto and blockchain was in 2014 when I invested in Bitcoin, which worked out quite well. Since then, I have entrenched myself in the blockchain scene, as the technology provides lots of features that would improve the way we live and do business. I have always been a firm believer in technologies that eliminate manual or intermediate processes. This attribute was one of the main reasons I led the proliferation of online marketing strategies in the traditionally rigid energy industry in Germany.
How well do you think you have coped in the burgeoning blockchain industry?
Marvin: I will say that my goal has been unmistakable right from the moment I decided to join the blockchain landscape. I set out to help startups fill a void that traditional funding mechanisms were unable to fill. IPO is increasingly becoming a tool that only established organizations could wield. On the other hand, tokenization provides a means to eliminate existing investment hurdles while offering impressive funding throughput. STO combines the legal aspect of IPO and the inclusiveness of ICO to generate even more fascinating results. Being a part of this emerging narrative is an accomplishment in itself. As such, I believe that I have felt right at home ever since I joined the blockchain industry.
What motivates you to keep pushing for the globalization of STO?
Marvin: As I mentioned earlier, STO offers improved funding capabilities without foregoing the security of investors. This functionality is ideal for startups with legitimate projects and looking to raise funds through a legal and yet flexible strategy. I am motivated to provide startups with this funding mechanism and improving their chances of accomplishing business goals that will impact the world.
Tell us a bit about CPI technologies?
Marvin: CPI Technologies is a platform that combines IT ingenuity and marketing tools to help startups build a solid brand. We go about this in a number of ways. For one, we help startups capitalize on the concept of tokenization/STO to generate funds and ensure that the interests of all parties involved in the investment scheme are protected. Likewise, we offer trading facilities for tokenized assets, which is one of the things that sets us apart from other blockchain accelerators. So far, we have helped over 40 companies achieve better market visibility and become global brands with investors from different regions of the world.
How do CPI Technologies go about offering STO-related services to its clients?
Marvin: We at CPI are very thorough when it comes to doing our job, and we have decided to specialize in STOs because of its legal backing. The first thing we do is to determine the viability of the startups’ projects or products. It is only when we certify that these products are legitimate and viable that we will get the ball rolling. Thereafter, we analyze startups' willingness to conform with regulations governing the issuance of securities. Then, we advise them on the tokenization framework, as well as the blockchain platform, that would best suit their businesses. More importantly, we discuss the jurisdictions that the STO would target, and those that it will avoid, before starting the process of tokenizing the company’s shares and creating an STO dashboard.
While exploring your website, I discovered that you have created an STO compatibility test. Please, tell us more about this.
Marvin: Yes, I created a 2-minute test that helps us gauge the propensity of startups and CEOs to adopt STO as a funding mechanism. With this, it is easy to ascertain the affinity of prospective clients for a regulated funding scheme and their desire to become appealing to a global hub of investors. The information garnered from the result of this test helps us pinpoint the type of STO service suitable for each client. Hence, I suggest that Startups should take this test.
What is the biggest challenge that CPI Technologies had faced since it launched?
Marvin: CPI is operating in a nascent market. Our biggest challenge is changing the mentality of the industry, which had once generated unprecedented successes from capitalizing on unregulated ICOs. However, as one of the first movers in the industry, we will certainly encounter lots of challenges, and others will one day use our successful business model as a template for maneuvering these limitations.
Is CPI involved in real estate tokenization projects?
Marvin: Of course, we are. CPI is a strong supporter of the concept of tokenization of real-world assets, and this is apparent in our growing influence in the real estate industry. Currently, we are spearheading a $700 million initiative that looks to tokenize part of Times Square. We believe that the success of this project will open the door for more asset tokenization endeavors around the globe.
Which blockchain platforms do you think are ideal to host asset tokenization projects?
Marvin: I recommend established blockchains, which have shown, time and again, that their security and decentralization features are unsusceptible to attacks. At the moment, I will advise startups to consider Ethereum, EOS, or Stellar.
What is the role of scalability and interoperability in asset tokenization?
Marvin: For everyone trying to create applications on blockchains or utilize the technology’s functionalities, scalability and interoperability would always popup as a source of concern. The goal is to create tokenization systems that allow instant ownership transfer and support a variety of popular blockchain ecosystems. Needless to say, this has proven to be a daunting task and had slowed the explosion of STO. However, I am impressed with the current drive of developers to eliminate these limitations, as things are looking up for blockchain’s scalability and interoperability.
You shared in a recent publication your take on the state of the ICO industry. Can you please reiterate your stance on this topic?
Marvin: ICO was instrumental to the market boom experienced in 2017. Ironically, it also contributed to the market slum of 2018. The reason being that a lot of the funds raised in 2017 via ICO vanished into thin air. Rather than put generated investments into good use, a shocking percentage of so-called startups used investors' money to fund luxurious lifestyles. As expected, the apparent loopholes of ICO and its unregulated industry have caught the attention of regulators, as we saw a fair number of legal tussles emerge in 2019. All these factors point to the unsuitability of ICO as a funding mechanism, which is why I always emphasize the validity of STO.
Do you believe that STO is poised to take 2020 by storm?
Marvin: I believe that 2019 was crucial to STO's promising outlook in 2020. We did a lot of groundwork, laid the right foundations, and created efficient systems and businesses that would push the STO narrative. Therefore, there is no doubt that 2020 will usher in the proliferation of asset tokenization and STOs. Remarkably, we are already seeing this take effect on a global scale.
How do you think crypto exchanges can align their businesses with this projected paradigm shift?
Marvin: The only option available to exchanges is that they would need to take up more regulatory responsibilities that will allow them to issue and transfer securities. Are these entities ready for the regulatory scrutiny that securities will expose them to? The answer to this question will unfold, even as STOs continue its uptrend in the business world.
What other blockchain development are you looking out for in 2020?
Marvin: Since the blockchain space is constantly evolving, there is a lot to look forward to. I for one cannot wait to see the concept of blockchain take effect in the real estate industry. The prospect of asset tokenization in this industry is limitless, and it would establish the efficacy of blockchain in sectors currently rooted in conventional techniques.