Security token offerings (STOs) are transforming financial markets by providing a regulated alternative to speculative initial coin offerings (ICOs) and bridging traditional finance with blockchain technology. Despite their potential, the STO industry faces challenges in fostering a sustainable ecosystem. This study explores critical factors and interactions within the STO industry by incorporating perspectives from platform operators, custodial institutions, regulatory authorities, and investors. Through in-depth interviews with 15 stakeholders and a causal loop diagram analysis, the authors identify key issues, including the need for competitive STO products, an active distribution market, balanced innovation and investor protection, and risk mitigation for unregulated sales. Based on these findings, they propose targeted strategies to address these challenges, offering practical and theoretical insights into the STO ecosystem and its sustainable growth.
Kim et al. (Wed,) studied this question.