Security Tokens Could See Rapid Growth in Europe, Outpacing Cryptocurrencies
Uploaded 28th May 2021
Security tokens could take off in Europe, potentially surpassing market volume for cryptos by 2026.
Sumitomo Mitsui Trust Bank to Issue Japan’s First Security Tokens
Uploaded 3rd April 2021
Sumitomo Mitsui Trust Bank, one of Japan’s largest banks, has completed its first asset-backed security token issuance pilot.
Luxembourg Gives the Green Light for the Native Issuance of Security Tokens
Uploaded 17th Feb 2021
Last week, Luxembourg’s regulator, the CSSF, adopted a bill that explicitly recognised the possibility of using distributed ledger technology for the dematerialisation of securities.
The regulation is moving quickly across Europe: Tokenized securities now fall under the same rules and regulations as traditional financial instruments in many other European countries including France, Germany, Italy, the Netherlands, Romania, Spain and the UK.
Fine Wines Become First Tokenized Securities Under New Swiss Blockchain Law
Uploaded 17th Feb 2021
Sygnum, a digital-asset finance firm with a Swiss banking license, has tokenized its first set of assets under the nation’s new law addressing the use of distributed ledger technology (DLT).
According to a press release on Monday, Sygnum Bank teamed up with Fine Wine Capital AG to tokenize a range of “investible fine wines,” issuing tokens representing the alcoholic assets on Sygnum’s Desygnate platform.
The move was enabled by the first phase of the new law, effective as of Feb. 1, with Sygnum and Free Wine Capital now free to register and transfer their tokenized assets without concern for any legal ramifications, according to the release.
Bill of law allows issuance of dematerialized securities in Luxembourg
Uploaded 17th Feb 2021
The bill of law no 7637 modifying the Luxembourg law of 5 April 1993 on the financial sector and the law of 6 April 2013 on dematerialized securities (the “Bill”) has been adopted on 21 January 2021* and aims at modernizing the existing legal framework for dematerialized securities, notably by explicitly recognizing the possibility to use secure electronic registration mechanisms, including distributed electronic registers or databases, for the purpose of issuing dematerialized securities.
DBS Bank’s Digital Exchange to Begin Trading Crypto
Uploaded 13th Dec 2020
DBS Bank of Singapore has officially announced the arrival of its digital assets exchange, with trading to start next week.
The DBS Digital Exchange is 10% owned by Singapore’s SGX stock exchange. It will also provide tokenization of securities and other assets, as well as bank-grade custody for digital assets.
ONCHAINID is a compliant universal identity system designed to easily identify market players and their selected assets on the blockchain.
- are smart contracts stored on the decentralized Ethereum public BlockChain.
- allow data owners to truly own their identity, whilst allowing trusted services to issue claims (Validation certificates).
- can’t be hidden or deleted. No service or organization can remove your access rights to it
- span a lifetime.
- have a unique identifier: its blockchain address.
- have no value in themselves. The value is in the information (claims) attached to it that gives credit to the identity.
Webinar Recording | Digital Assets-
Are they shaping the future of investments ?
CMS presents an informative webinar focusing on Security Tokens. Apart from other speakers, Daniel Coheur from Tokeny Sarl explains the significance of Security Tokens in the securities market place. (22.00 minute mark)
A legal framework for token offers has been adopted by The Government of Monaco
The government of Monaco has formalized a Memorandum of Understanding with Tokeny Solutions as its technology provider to support the issuance of tokenized financial instruments.
Long-awaited in the context of the Principality’s digital transition, the bill relating to token offers was approved yesterday by the elected members of the National Council after being examined by the commission for digital development.
Onchain Finance: Leveraging Decentralized Technology for Capital Markets Infrastructure by Luc Falempin – Tokeny
In our previous article, we defined the concept of DeFi and how it differs to the infrastructure that’s commonly used today. As discussed, there are clear advantages in using a decentrlized infrastructure for financial markets, particularly in regards to investor onboarding. The basis of this article will be to discuss how firms can improve capital markets infrastructure, specifically compliance obligations, by leveraging decentralized technology.
Applying decentralized technology to capital markets is a highly complex matter in regards to compliance. Regulations that govern the world of financial securities differ from country to country and every year are becoming stricter and stricter. This is an area the financial industry, particularly banks, are facing significant challenges with. Globally, within banking, $270 billion is spent per year on compliance. This attributes to 10% or more for most bank’s operating costs and is a number that could double by 2022. These compliance obligations eat into profitability due to fragmented systems and poor reporting methods. Each bank is required to store sensitive information on their customers, something that requires much resource to ensure data is kept securely.
What is De-Fi?
Luc Falempin from Tokeny explains
In this article I will explain the definition of DeFi and what benefits this new concept will bring to capital markets. Alongside CBDCs, to the pandemic that’s currently sweeping across the world and causing global markets to crash, we expect Decentralized Finance (DeFi) to make big advancements within capital markets over the next year. The recent crash could work as a catalyst for the adoption of DeFi as companies will be forced to reduce cost and look for efficient solutions. But what is the definition of DeFi and how can capital market rules and regulations work on a public infrastructure?
Tokenization Of Real Estate Made Simple: STO + Blockchain + Tokenized Property (2020 Updated)
As per the report, the size of the professionally managed global real estate investment market grew from $7.4 trillion in 2016 to $8.5 trillion in 2017 and then it reached $8.9 trillion in 2018.
Real estate tokenization is an emerging trend with huge benefits and it is expected to grow more in the upcoming years.
So now when we got your attention, then let’s talk about what tokenization of real estate or property means, types of Real estate tokenization, how the tokenization process works, STO Process, and how owners and investors can benefit.
In fact, this is the most updated (2020) guide about the tokenization of real estate.
HSBC Puts $10B of Private Placements on R3’s Corda Blockchain
HSBC has put $10 billion of paper-based private placement records on R3’s Corda blockchain and plans to ramp up the project through this year and next.
“We’re confident that we’ll be able to put significant additional volume and value of private placements from new and existing clients [on the platform] over the next 12 to 18 months,” said Ciaran Roddy, head of custody innovation and strategy initiatives at HSBC.
The company had previously announced it would have $20 billion on the platform by this month. HSBC told CoinDesk that efforts to increase the functionality of the platform due to client interest is what has slowed its on-boarding push.
With no immediate plans to move into the crypto space, HSBC is focused on assets that have yet to be digitized as well as exchange-based security tokens and traditional assets that could be fractionalized. The bank is also seeing demand from clients to use tokens for a whole fund lifecycle, Roddy said, as well as tokens that are a basket of assets wrapped into one.
The Potential Impact of Security Token on Private Capital Markets
As ICOs continue to falter, investors have quickly become interested in security token offerings (STO).
In contrast to ICO issued utility tokens, security tokens represent ownership of an underlying debt, equity, or real estate asset. Their issuance operates similarly to traditional debt and equity investment instruments. However, these digital assets are stored on the blockchain rather than “on paper” like stocks and bonds.
In step with increasing crypto adoption, financial institutions and regulators across Europe have begun to embrace security tokens. Just recently, the German Bafin approved Bitbond’s virtual bond financing. Signs of regulatory support like this are encouraging for the industry – the cost and revenue benefits of digital assets are vast.
MetalStream Token Upgrades
MTLSTR and MSGLD are now using the T-REX security token standard
The first versions of both the MTLSTR equity-backed token and the MSGLD gold-backed token were created using Polymath’s ST-20 standard, on the Ethereum Network. Polymath’s focus is now on their proprietary Polymesh network, which is a fundamental issue.
MetalStream will be soon selling up to USD 100 million of MSGLD via public offer, prior to our planned listing of MSGLD on a regulated exchange in June. We believe the future of security tokens relies on creating a frictionless environment with the largest possible number of participants, and that a move away from Ethereum will not help provide liquidity for MSGLD holders.
The Australian Securities Exchange is about to embrace DLT
As part of the CHESS replacement project, ASX will use distributed ledger technology – DLT.
DLT uses an append-only database of transactions that has two key elements:
- a shared, replicated ledger and
- a distributed database synchronizing mechanism. Each transaction must reference a balance received from a previous transaction and must be cryptographically signed by the legal approver of the transaction. The solution forms an exact chain of title over time.
The Future of Asset Management in an Ocean of Tokenized Assets
As the digital asset ecosystem grows, many experts are asking how traditional asset managers will respond to the paradigm shift underway in how we store and transact securities. Hedge funds, family offices, mutual funds, pension schemes and other financial professionals seem poised for the perfect moment to enter the digital asset space — but how will tokenized assets, still in their nascency, help asset managers deliver better services?
With the tokenized future approaching seemingly unabated, industry experts need to consider how new asset classes which have arisen from tokenization, or existing assets which have been tokenized, might fit in to the wider financial services industry.
Tokenization of Financial Assets: The Missing Brick
“Why hasn’t tokenization come to fruition? Globally, there have been many projects announced but many of the public STOs have failed to reach their fundraising targets and it’s clear that there is still some way to go before this new infrastructure is fully built. In this article I give some thoughts on the three missing bricks that are needed to build this ecosystem.”
Recent estimates place the current value of all real-world assets at around $256 trillion globally. While that jaw-dropping number is fairly stable, all of these assets keep changing owners on a regular basis.
Unfortunately, the processes used to trade these assets are completely outdated.
Ownership over a vast majority of real-world assets is still signified by pieces of paper. That’s why most transactions can take weeks or even months to complete. Asset trades are also plagued by extensive amounts of red tape, countless fees and various geographical restrictions. Furthermore, most assets are very difficult to subdivide, which makes their respective markets highly illiquid.
Real Estate Tokenization – How Blockchain Technology Could Revamp and Streamline an Entire Industry
Traditionally speaking, the real estate market has always been intimidatingly complex, regardless of whether you were just analyzing it or looking to invest in a piece of property.
A myriad of regulations to keep an eye on, dozens of legal hoops to jump through, various stakeholder rules, unpredictable transaction costs, a notorious lack of transparency, constantly fluctuating prices, a plethora of pitfalls that lead to additional fees, etc – all of these issues contribute to what can easily be classified as one of the more intricate markets of the 21st century.
However, if we play our cards right, these derailing dysfunctions could soon be a thing of the past. More and more experts are entertaining the notion of introducing blockchain technology and tokenization to the real estate market, which could send the entire sector into a spiral that would be nothing short of a genuine revolution.
First regulated Real Estate Fund tokenized
Uploaded 21st Jan 2020
Zug, 16th of January 2020 — The Zug-based Blockchain company Token Factory has developed a secure and scalable tokenization solution powering the first regulated real estate fund in Europe. The FMA (Financial Market Authority Liechtenstein) has recently authorized it as an Alternative Investment Fund (AIF). As a technology partner, Token Factory developed the solution in cooperation with Bank Frick.
Blockchain is no longer limited to crypto-currencies such as Bitcoin or Ether: Based on the Ethereum Blockchain, so-called security tokens can be created to digitally represent various assets. In March 2019, Token Factory in Zug became the first blockchain provider to tokenize a property in Switzerland, using its blockimmo platform. In the meantime, the start-up company supports other companies in tokenizing projects that are to be announced soon.
Tokeny – SDC Preferred Partner in the tokenization of investor funds
Uploaded 20th Jan 2020
Our preferred partner Tokeny explains the relationship between tokenization and current uses in the ever-evolving digital marketplace.
SIX and the SNB explore technological approaches for the use of digital central bank money in the settlement of tokenized assets
Uploaded 14th Jan 2020
The following is extracted from the article SIX and the SNB explore technological approaches for the use of digital central bank money in the settlement of tokenized assets.
The SIX Digital Exchange (“SDX”) is a Swiss exchange building a fully integrated issuance, trading, settlement and custody infrastructure for digital assets including security tokens and, will be under the regulatory requirements of the Swiss Financial Market Supervisory Authority FINMA. Members of the exchange, usually licensed financial institutions will not only be able to trade on public marketplaces but also privately between themselves. SIX will be the first in the world to introduce the first distributed ledger technology (DLT)-based platform for the issue, trading, settlement and custody of digital assets.
World Economic Forum – 5 ways blockchain can transform the world of impact investing
Uploaded 16th December 2019
A growing number of forward-looking investors seek to generate social and environmental impact as well as financial returns. According to the 2018 Impact Investment Survey by the Global Impact Investing Network, respondents invested $35.5 billion into 11,136 deals during 2017.
We believe that the growth of impact investing is stifled by:
• The lack and/or high cost of trustworthy data on the social or environmental results of an investment, making credible accounting of impacts difficult
• Challenges around the “attribution” of impact – meaning the allocation of an impact-related claim to an investor, often risking the “double-counting” of claims
• Roadblocks in monetizing impacts – i.e. illiquid impact markets, uncertain returns, high transaction costs
Could blockchain-based solutions solve these problems?
Blockchain technology currently revolutionizes the storing, management and transfer of value between digital identities in many economic sectors. Blockchain-based tokens are used to crowdfund new business ideas, enhance transaction-based business processes and serve more generally as stores of value.
Blockchain has recently made its way into the impact investment community, and a broad range of use cases are being developed to take advantage of its features, giving rise to a new category of application referred to as “impact tokens”. These tokens represent a UN Sustainable Development Goal-related impact, usually in the form of a quantified, unit-based measurement metric, which is linked to its origin (the activity that created it, which also represents its identity). These tokens can be used to make performance-based payments, track impacts through supply chains or substantiate claims on supporting SDGs.
The case for blockchains in impact investing
The management of assets on a blockchain have a number of advantages, from which impact investing could potentially benefit: greater transparency, enhanced security, improved traceability, increased efficiency and speed of transactions, and reduced costs. These features add real value within the context of impact investing:
1. Trust: Many impact investments take place in developing countries with low institutional capacity and low-trust environments. The use of blockchains mitigates the need for trust due to its built-in trust-generating features, thus reducing reputational risk exposure from unverifiable claims. Blockchains can also help automate and accelerate impact measurement and verification which, using current models and processes, remains slow and expensive. At a higher speed and reliability, impact creation can be used as a parameter in performance-driven dashboards for managing impact investments.
HNW Impact Investing on the rise
Uploaded 5th Dec 2019
The following is extracted from the Wealth-X article on ‘HNW Impact Investing on the Rise’
Wealth intelligence is a term used to describe how the philanthropic, investing, and spending habits of wealthy individuals are interrelated. The recent rise of HNW impact investing reflects how the wealthy are now making decisions of the heart and conscience when investing their money.
The Global Impact Investing Network is reporting that HNW investing is gaining in popularity and that assets under management (AUM) in impact-oriented investments jumped from $114B to $502B from 2014 to 2018. While this number still represents a very small share of total invested assets globally, there is a clear and growing desire for investment opportunities in this space among the wealthy. Traditional asset management professionals recognize this demand and are acknowledging that there is an increasing public demand for companies to serve a social purpose.
HNW impact investing is still a maturing field and is largely dominated by foundations. Though there is some involvement from Limited Partners (LPs), the field currently lacks the full range of packaged solutions and financial instruments available to brokers and fund managers to offer to individual investors.
The rise in HNW impact investing is driven in part by a generational change in investment philosophy. A wide range of practitioners and observers have pointed out that younger investors are more interested in asset management strategies that align with their social values. These investors are affecting older investors and impacting corporate giving, which has grown as corporate social responsibility programs become more important.