Everyone talks about STOs but no one exactly knows how it will interact with the legacy jurisdictions... What do you code in a security token? Equity? Voting rights? Votes? Dividends?
If it's Dividends and equity isn't this a convertible note? Debt?
I think we still have to wait for regulation to follow through this before you make any hasty decision around STOs.
If STO done right it doesn't interfere with the legacy legal rules as per that jurisdiction. Just need to know what type of STO is compatible within which jurisdiction.
E.g. in the Netherlands STO'ing equity would require a notary deed (from a notary) every time equity changes hands. This wouldn't make it the greatest fit.
Now if we use a construction such as the dutch STAK, we are able to trade economic rights derived from the equity without requiring a notary. Thus making it viable to STO economic rights (which in many respects are similar to equity) in the Netherlands. Its a matter of knowing what can be done, and how it should be done.