New legal provisions on distributed ledger technology (DLT) went into effect on February 1, 2021 in Switzerland. Soon after the implementation, two local companies announced the issuance of the first tokenized asset under the brand-new law, marking a significant step in the convergence of traditional assets and blockchain technology.
'Fine Wine' Token Available for Sygnum Bank's Clients
According to the announcement, Swiss digital asset bank Sygnum and Fine Wine Capital AG launched a collectible premium wine-backed token, becoming the first to operate under the updated national blockchain rules. Assets tokenized through Sygnum's platform, Desygnate, will be recognized under a new category of ledger-based securities in the law. The 'Fine Wine' token is offered 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 legal 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, noted that the new legal provisions offer a 'viable alternative to traditional securitization from a legal point of view.' The move is expected to attract more issuers of tokenized real-world assets to Switzerland's regulated ecosystem.
Recent Cases of Tokenized Assets Around the World
Asset tokenization continues its global momentum across various markets. In Argentina, Coreledger announced a partnership with Abakus to create a 'digital barter economy' that enables farmers to tokenize their agricultural assets as a hedge against rising inflation. Farmers can redeem and trade their tokenized titles on the Abakus peer-to-peer platform.
In Russia, Nornickel, one of the world's largest palladium producers, revealed in December 2020 that it had started the first stage of issuing digital coins tied to metal contracts. The mining giant's initial tokens are linked to palladium, cobalt, copper mining, and exploration activities.
These developments illustrate the growing appetite for tokenized assets globally, with Switzerland positioning itself as a leading jurisdiction for compliant digital asset issuance. The new DLT law provides clear rules for issuing digital securities, reducing legal uncertainty for both issuers and investors.
The success of the Sygnum-Fine Wine Capital token could pave the way for other asset classes such as art, real estate, and commodities to be tokenized under Swiss law, offering liquidity and accessibility to previously illiquid markets.