On world’s Security Token Offering epicenter — The Netherlandsby@adriaanjacobbrouwer
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On world’s Security Token Offering epicenter — The Netherlands

by Adriaan Jacob BrouwerSeptember 2nd, 2018
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Ever wondered where the word ‘Stock’ comes from?

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Ever wondered where the word ‘Stock’ comes from?

It comes from the Dutch word ‘Kerfstok’ — a medieval tool used to keep track of financial transactions in the form of debt and/or advanced payments [1].

The predecessor of financial instruments such as shares, bonds, derivatives, securities and the like, was essentially a system of two sticks whereby one was held by the debt holder and one was held by the credit holder.

The sticks evolved to become tradeable financial instruments and eventually a currency across medieval Europe.

Experts state that the Dutch gained supremacy in World Trade (1585–1740) by virtue of their financial innovations in trading expeditions [2].

The theory of hegemonic world cycles states that every global shift of power was marked by a country’s technological advantage over other countries [3]. Naturally, there are more factors that cause a global shift of power, but the theory tries to cut down to one or two advantage(s).

See a simplified explanation of shifts in hegemonic world power below:

  • Portugal: 1494–1580. Ship-building techniques and sea power expertise.
  • The Netherlands: 1585–1740. Innovations in finance/collective investment.
  • United Kingdom: 1800–1910. Industrial revolution.
  • United States: 1914 — Present. Division of labor and mass production.

The shift in world power from the Portuguese to the Dutch occurred because a group of people standing on the canals in Amsterdam figured there were better ways of financing a trade expedition. Someone probably said:

‘What if we collect money from rich merchants on the land and use their money to build strong ships and pay them interest on the loot from our expedition?’

The idea of issuing shares and building world’s first corporation (the VOC) was born…

Just like the merchants and sailors might have felt something disruptive was about to happen in 17th century finance, I feel something is about to happen now, in the 21th century. This is also related to trading, finance, liquidity and proof of ownership.

In this post, I will elaborate on why I believe the Netherlands is the perfect breeding ground for a security token ecosystem to emerge. I will try to base my reasoning on recent local events I have participated in and more general information about the Netherlands as an entry point for tech and innovation.

Security tokens in the Netherlands in 2018

It starts with events

A couple of months ago, I attended an event on the Future of funding & Blockchain. People from different blockchain projects came together to discuss the possibility of the ecosystem merging together with legislators, governments and the financial authority (AFM).

The event was held at an iconic venue: The Amsterdam stock exchange , world’s first stock exchange [4]. Perhaps, this stock exchange will also evolve to become the world’s first institutional security token exchange — the designated corner for crypto traders is already a good start.

Amsterdam stock exchange — source

On the 15th of August I hosted a Security Token Offering (STO) meetup event together with my colleagues at our VMC.AI office in Amsterdam. Our goals were to share the knowledge we gained in the ramp up towards our own STO and learn from others that are interested in the space.

I was impressed bythe amount of people and companies that attended, and their involvement in the security token space. Several start ups, such as: Peliqan, Eventx were already involved in an STO or planning to start an offering soon. A significant portion of the start ups that attended are not even utilizing blockchain technology in their solution, but are simply leveraging the benefits of security tokens as a means of funding for their project.

The founders of Core Digital, a subsidiary of the Kane and Rao Group, were present at the meetup. They provide an end-to-end solution for companies that want to issue/offer security tokens to the general public. A visit to their office at Amsterdam’s financial center taught me that these guys are very knowledgeable about how to set up and market an STO in the Netherlands.

A handful of traditional investors also attended the meetup, shedding their lights on the link between crypto and institutional investors. Which was good because, in my opinion, we must meet in the middle — as I described at the end of my earlier post.

In September, I gave an open guest lecture about security tokens at the University of applied science in The Hague, whereby an excited group of finance, business and computer science students explored the possibilities of a tokenized future.

Adriaan Jacob Brouwer, VMC on LinkedIn: "I really enjoyed giving my first guest lecture ever (😱)…_September 18, 2018: Adriaan Jacob Brouwer, VMC posted images on

It is impressive to see such an early move by a university to teach its students about the matter.

Now, that we have acknowledged the current state of security tokens in the Netherlands, it would be even more interesting to place this in the context of the Netherlands as an European (fin)tech hub.

In an attempt to answer the following question:

Why the Netherlands?

A Tech Haven

The country is ranked second on the Global Innovation Index (GII) [4]. According to I Amsterdam, there are more than 250k tech workers in Amsterdam, meaning that 25% of the city’s population works in tech [5].

The Netherlands is perceived as a perfect entry point for international tech companies trying to get a foothold in the European market [6] for the following reasons:

  • Tolerant Startup visa requirements
  • Best “English as second language” speakers worldwide
  • International trade treaties and geographical location
  • High level of education

EU compliance

The European Union (EU) requires companies within the EU to publish a prospectus when securities are offered to the general public or admitted to trading on a regular market [7].

Which means that issuance of a security token under supervision of the Dutch Finance Authority (AFM) is automatically compliant to regulations of other European countries such as Germany, France, Denmark, Sweden etc.

Early adopters

The first signs of adoption are apparent in the overheated housing market of Amsterdam.

Housing prices in Amsterdam are soaring due to a lack of availability on one hand, but on the other hand, one out of eight house buyers are not going to live in their house. The number of house owners that own between two and 50 houses has doubled over the last ten years. To top it off, twenty individuals own more than 100 houses in the country’s capital [8].

Houses are traditionally illiquid assets, which adds to the rising inequality problem indicated above. What if we could make the value of these assets liquid? That would potentially unlock a lot of financial benefits which can be used to develop new properties for the greater good of society.

I was not the first to draw this conclusion…

Property manager Annexum and fintech startup Bloqhouse started a pilot to make investing in property more accessible.

MijnVastgoed is collaborating with real estate owners to split real estate assets into different tokens in which everyone can invest.

Founder of the International Blockchain Real Estate Association (IBREA), Ragnar Lifthrasir, acknowledges that a vast number of quality startups and real estate companies are jumping on the new tokenized possibilities, whereas real estate companies in the US are a bit more reluctant [9].

Furthermore, a handful of startups are creating security token issuance platforms that comply with the EU prospectus standard. However, these projects are in a relative early stage and, therefore, it is too early to mention them here.


It is not easy to draw firm conclusions from multiple fragmented pieces of information that somehow relate to the main argument I tried to make in this post. Furthermore, none of my claims in this post rely on a solid basis of aligned arguments that indicate that the Netherlands will indeed be the world’s center for security token offerings. And, perhaps, the security token industry is too young to even make claims about where it would be clustered.

Maybe the security token trend is explosive in every tech hub worldwide, at this moment. Of course, this would mean that the adoption and events happening in the Netherlands are not so special after all. Or maybe I am just hoping that Amsterdam will be the epicenter of security tokens, since I am so fascinated by it and would love to be on top of the action.

Nevertheless, I hope that my examples in this article show that the Netherlands might be the perfect ground to grow the ecosystem.