CoinDesk’s Christine Kim sat down with Dalma Capital Management CEO Zachary Cefaratti,

R3 Director of Digital Assets Antony Lewis and Philip Pang of Colliers International last week for a panel discussion called the “State of Security Tokens in Asia.”

R3’s Lewis kicked off the event, speaking to Invest: Asia 2019 attendees about the current market trends in securities issuance. Lewis said ecosystem readiness, regulatory harmonization and the need for experienced investors stand atop the heap of present concerns.

Speaking on security token offerings, Dalma Capital’s Cefaratti said companies are more often than not shipping low-quality products with security token offerings.

“Why would you do a security token? There’s an adverse selection problem,” he said. “Unfortunately, we get approached as an investment bank by so many companies that want us to do a security token of their not very high-quality asset and think that it’s going be a solution to magically raise them a bunch of money and get a bunch of liquidity.”

Pang of Colliers said Asian real estate firms are mostly seeing security tokens in high-yield assets like apartment complexes or industrial warehousing.

Wrapping up the conversation, Cefaratti and Lewis spoke on the role of security token custodianship.

“There are some situations where you can not legally self-custody and you need to for because of regulatory reasons pay a third-party custodian,” Lewis said.

“The marginal cost of providing custody of an additional dollar of assets is zero. It’s next to zero,” Cefaratti responded. “Marginal cost determines the marginal price. Yes, we will need [digital asset custodians], but it won’t be a very profitable business.”

Zachary Cefaratti and Antony Lewis as Invest: Asia 2019 via CoinDesk archives