On Dec. 9, the South China Morning Post published an article reporting that Pan Gongsheng, a deputy director of the People’s Bank of China — the Chinese equivalent of the Fed — had some negative comments regarding securities token offerings or STO’s. The comments were made at an internet finance conference.

“The STO business that has surfaced recently is still essentially an illegal financial activity in China,” Gongsheng told the forum, according to state-owned China Central Television. “Virtual money has become an accomplice to all kinds of illegal and criminal activities.”

It seems the Chinese are lumping STO’s and ICO’s together for nothing more than propaganda purposes. From a Chinese point of view, these comments may make sense. China has a shadow banking system that could be considered a fraud on a scale several orders of magnitude larger than what happened with ICOs. Many traditional Chinese equities are questionable investments as well. The Chinese domestic stock market (ASHR) has done nothing but go down this year.

In contrast, there is the view of STO’s coming from a firm that will facilitate creating them, like Polymath (POLY).

“We have people coming to us every week saying (they) want to create a security token,” said Graeme Moore, a spokesman for Polymath. “Polymath is a firm dedicated to the creation of STO offerings.”

Unlike an ICO, an STO in the U.S will be a security that is compliant with the SEC. It will allow large and small business to raise capital without the friction of Wall Street fees. According to Moore, it can cost $100,000 to $200,000 to get an IPO listed on the New York Stock Exchange. So while there has not been an STO done to date, the potential costs savings are enormous for firms trying to raise capital through this mechanism.

Polymath (POLY) has a software platform that allows companies to issue securities that are fully compliant with anti-money laundering (AML) and know your customer (KYC) regulations. Polymath’s software platform allows companies looking to do an STO by shopping from a list of vendors that can handle the legal, compliance, financial advisory, and marketing processes for their STO.

Polymath’s software platform allows a company to do an STO itself and get professional help with every step of the process, down to who is allowed to buy the token and how long they may hold it. You can use Polymath to programmatically enforce regulatory restrictions on who can and who cannot own an STO. This eliminates the Wild West aspect of ICO’s that included tokens that were issued with no regard for regulation of ownership or holding period.

So just because a big country bans STOs, that doesn’t mean STOs have no future. With global stock markets in the midst of a rout, it won’t be too long before a big STO is created that ignites the whole space.