Founded in Geneva in 2009, independent Swiss bank Cité Gestion became the world’s first member of the private banking sector to tokenize its own share capital in the form of blockchain-based securities. The bank has total assets under management of around CHF7bn ($7.5bn) and a workforce across its four branches in Switzerland of around 100 people.
According to a statement, the company partnered with digital asset technology company Taurus in order to facilitate the process.
The tokenization was implemented according to standards established by Swiss non-profit, the Capital Markets and Technology Association (CMTA), which promotes the use of distributed ledger technologies (DLT) within traditional capital markets. An open-source smart contract developed by the CMTA was deployed on the Ethereum blockchain in order to create and manage the tokens.
Deputy CEO of Cité Gestion, Christophe Utelli, noted that it was important for the bank to be a front-runner in the adoption of new technological possibilities which have been incorporated into Swiss securities legislation, stating:
“At Cité Gestion, our vision is to make it possible for our clients to take full advantage of technological progress in the capital markets, and in particular of the huge potential of rationalization and efficiency gains that the distributed ledger technology offers in this field.”
He went on to praise the industry-supported CTMA standard as a ‘natural choice’, with a robust, open-source framework, ensuring suitable risk management remained at the core of the process.
Technology-partner Taurus was able to complete the tokenization process in mere minutes, through its full-service platform, comprising digital asset issue, custody and management tools. The company obtained a securities license from the Swiss Financial Market Supervisory Authority (FINMA) last year, and has since supported 15 companies across Europe in tokenization projects covering equity, private debt and structured products.
Co-founder and managing partner, Sebastien Dessimoz, sees a bright future for the digital assets sector in the coming year, saying:
“We believe 2023 will mark a step change in the industry and we are ready to support private companies to make the move.”
The tokenization of real-world assets has been a hot-button topic in the blockchain space for some time now and one of the DLT trends expected in 2023. Benefits such as cost-efficiency, improved liquidity, 24/7 market access and the elimination of intermediaries have the potential to shake up traditional capital markets, and almost every current asset class could be improved through their implementation.
Will 2023 be the year that sees the technology find mainstream adoption? We will continue to observe with interest.