All of this development discussion is kinda cool. I don't know why it's in Securities though, because these ideas either skip over entirely or flat out ignore the problems and standards of finance, which no amount of technical architecture, however great, can address entirely on its own.
I am aware that Bitcoin CAN work with scripts (and in some cases it might make sense to represent IOUs with Bitcoins). The trading + order books of the represented IOUs however should likely happen outside, either with blinded tokens on dedicated servers like OpenTransactions suggests, on a completely new alt-chain (several ideas flying around, never heard about actual implementations - maybe Namecoin could be viewed as one), on Ripple or a fork of it or on a centralized exchange (GLBSE, btct, bitfunder... you see how they end up!).
"They" aren't "centralized exchanges", they are/were play exchanges operating on the notion that having a website and putting up the appearances of trading along with a lot of good intentions makes a thing real. They don't make it real.
OpenSource software exists right now running on servers and being available for listing and trading assets denominated in BTC using Open Transactions (via blinded tokens), Colored Bitcoins and Ripple. Also there are centralized (often closed source) exchanges that put a strong focus on crypto (e.g. MPOE where every trade etc. is signed with PGP keys so it is externally verifiable and auditable).
There'd be one, MPEx.
MPOE is a bond through which the options trader finances itself, and the trader together with MPEx form the underlying for S.MPOE (traded
here).
The platforms exist for months and years already, it is just that issuers of securities seem to be more happy with using centralized websites than not-so-nice but secure and distributed exchanges.
Issuers of real securities have no problem using the actually secure exchange, or with being held accountable, and so forth. People who either lack the requisite skill or knowledge, who simply don't have something of value to offer, or who are outright scamming on the other hand have a problem, and rightfully so, in terms of being accepted by MPEx and meeting its standards. A scenario in which this problem is removed and the only block to listing is messing around with some code or paying someone else a pittance to do it for you is doomed to as much spectacular failure as you've seen emanating from the previous "citizen finance" attempts.
The current set of regulation obviously the community cannot live with. That is why Bitfunder and btct are shutting down. If it were just a matter of KYC then Bitfunder would have no reason to shut down. Bitfunder could just verify the current shareholders and let them continue trading. None of this had to happen except for the fact that the current laws in place have a lot of other stuff added to it which go beyond solving the problem of terrorist financing and money laundering.
This is a rather skewed representation of what's happening. That a series of people
not qualified to run a securities exchange have stepped up in an attempt to bring low-boundary, incredibly sketchy non-solutions to "the community" at large and have subsequently found themselves in over their heads does not mean the problem is "the current set of regulation". The problem is that finance is not a mass consumer thing to be packaged up and handed out by anyone at all with a hope and a dream.
There's a big difference between the sort of red tape regulation nonsense governments have no business injecting here and enforcing simple, established, powerful rules that keep scammy and otherwise worthless stuff out.
GPG contracts.
Security that isn't based on the limitations of a "slick" website.
Actual IPOs from actually planned out,
accountable entities. Yes, there's a fee. You're paying for that which works, which in the end is all that's worth paying for. No, I'm not especially nice in that In-N-Out Burger sort of way (though I'm just PR, you don't have to deal with me at all to use the exchange). The lies, the sugar-coating, the beating around the bush, is exactly for cheap food service and has no place in BTC finance. Plenty of people have thrown a fit over these facts, I'm sure plenty of people will continue to do so, and will continue to lose their money. MPEx will be right here.