- Securitize announces the first tokenized equity issuance in Europe under the EU’s digital asset pilot regime, utilizing Avalanche’s smart contract network.
- Tokenization of assets like private equity and debt paves the way for a more efficient financial system, potentially disrupting the current financial infrastructure.
In an era where blockchain technology and cryptocurrency are transforming economic landscapes, Securitize, a leader in asset tokenization, has taken a monumental stride. The firm has launched the first tokenized equity issuance under the European Union’s (EU) pilot regime for digital assets.
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A New Era for Equity Issuance in Europe
The tokens, circulated via the smart contract network Avalanche (AVAX), denote equity in the Spanish real estate investment trust, Mancipi Partners. The endeavor, supervised in Spain’s securities regulator (CNMV) experimental environment, represents a watershed moment in the union of conventional investment vehicles and blockchain applications.
Investment products, once considered old-school such as private equity and debt, are increasingly transforming into tokenized assets on the blockchain. This shift suggests a potential disruption of prevailing financial infrastructures and a more streamlined system. Bank of America (BAC) endorses this perspective, and Boston Consulting Group further substantiates it by predicting the tokenized asset market could skyrocket to an impressive $16 trillion by 2030.
As per Securitize’s CEO, Carlos Domingo, European enterprises stand to gain significantly from this innovation. This paradigm shift not only paves the way for a novel method of raising primary capital, but could also afford potential tax advantages and amplified liquidity through secondary trading.
Securitize is no stranger to tokenization initiatives. Last year, the firm tokenized investment funds for Hamilton Lane and KKR, both US-based asset managers. Furthermore, Securitize ventured into Europe, marking its presence in Spain’s regulatory test environment for digital assets.
This first tokenized equity issuance comes under the EU’s Distributed Ledger Technology (DLT) pilot regime. This program is designed to establish a regulated trading environment for securities such as equities and bonds using blockchain technology.
The success of Securitize and Avalanche in this initiative marks the beginning of a new chapter in European asset tokenization. It paves the way for a financial future where tokenized assets like real estate, company equity, venture capital, and intellectual property are the norm, with Citibank projecting a $4 trillion market by 2030 for these tokenized private financial and real-world assets. Moreover, it has the potential to democratize the financial sector by increasing accessibility and fostering portfolio diversification, thereby revolutionizing asset management and ownership in the digital age.