New legal provisions on distributed ledger technology (DLT) in Switzerland came into effect on February 1, 2021. Shortly after, two local companies announced the issuance of the first tokenized asset under the new regulatory framework.
‘Fine Wine’ Token Available for Sygnum Clients
According to the announcement, Swiss digital asset bank Sygnum partnered with Fine Wine Capital AG to launch tokens backed by premium collectible wines, becoming the first to utilize the updated blockchain rules. Assets tokenized via Sygnum's platform, Desygnate, are recognized under a new category of ledger-based securities under the law. The “Fine Wine” token is now listed in the “Art & Collectibles” category for Sygnum's clients.
The “Swiss Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology” provides a framework that links financial and real asset ownership to DLT-based asset tokens. Alexandre Challand, co-founder of Fine Wine Capital, explained: “Tokenization of wine assets enables us to expand our private collector investor base to new private and institutional investors interested in fractional ownership in distinctive real assets. This provides them the opportunity to hold, trade or request a physical settlement of this unique asset in an efficient manner.”
Gino Wirthensohn, Sygnum Bank's head of regtech, stated that the new legal provisions offer a “viable alternative to traditional securitization from a legal point of view.”
Recent Cases of Tokenized Assets
Asset tokenization continues its growing trend across various markets. Recently, Coreledger announced a collaboration with Abakus to establish a “digital barter economy” in Argentina. The project enables farmers to tokenize their agricultural assets as a hedge against rising inflation. Argentine farmers can redeem and trade their tokenized titles with any other asset through the Abakus P2P platform.
In Russia, Nornickel, one of the world's largest palladium producers, disclosed in December 2020 that it had started the first stage of issuing digital coins tied to metal contracts. The mining giant indicated that its initial tokens would be linked to palladium, cobalt, copper mining, and exploration activities.