Securitize has become the first company to issue, and trade tokenized securities in both the US and EU.
Securitize’s entry into the European market follows its participation in Spain’s digital asset securities sandbox. 

Securitize, a tokenization firm, and trading platform based in the United States, is venturing into the European Union by tokenizing the equity of Spanish real estate investment trust Mancipi Partners. According to a recent announcement, Securitize has become the first to issue, and trade tokenized securities in the US and EU. The company oversees investor onboarding, share issuance, and capitalization table management.

The shares are tokenized on the Avalanche blockchain, and secondary trading is anticipated to commence in September. Tokenization involves converting conventional financial assets into digital tokens issued on a blockchain. This process is praised for its potential to lower costs and enhance efficiency. BlackRock CEO Larry Fink envisions that the future of markets and securities lies in the tokenization of securities.

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My insights about Asset Tokenization and its revolutionary impact on asset management and ownership in the digital age!

Tokenization, using blockchain and smart contracts, creates digital tokens representing ownership or rights to an underlying asset. #Avalanche pic.twitter.com/uEG8b9BOeR

— Ubaid (@Ubaid_Cryptic) July 31, 2023

Securitize’s Expansion to the European Market

Securitize’s decision to issue tokenized real estate securities follows its participation in the Spanish General Secretariat of the Treasury and International Finance’s digital asset securities sandbox. The firm is anticipated to function within the EU’s Distributed Ledger Technology Pilot Regime, established by the European Commission in March and overseen by the European Securities Market Authority (ESMA). The primary aim of the pilot is to facilitate regulated trading of securities using blockchain technology.

Securitize is registered as a stock transfer agent and alternative trading system with the Securities and Exchange Commission (SEC) in the United States. Additionally, it is a member of the Financial Industry Regulatory Authority (FINRA).

Regarding the company’s involvement in the sandbox, Amparo Garcia Flores, the CEO of Securitize Europe Brokerage and Markets, commented: “This is not just theoretical work; we are proving that what we have in the USA is feasible in Europe. This means we can open our market to both sides of the Atlantic, effectively doubling the size of our business and the opportunities for issuers in Europe who previously did not have the same opportunities as their American counterparts.”

Flores highlighted several advantages of tokenized capital markets compared to conventional ones. These include continuous full traceability of securities, cost reduction by eliminating intermediaries, and direct market access for retail investors. Tokenization enhances liquidity by enabling assets to be traded on secondary markets, benefiting businesses and investors. 

Carlos Domingo, the CEO of Securitize, believes European businesses will benefit significantly from this innovation, offering them new ways to raise capital and potential tax advantages. 

The Potential of Tokenization: Revolutionizing the Financial Infrastructure

Bank of America predicts that tokenization could revolutionize the financial infrastructure, leading to a more efficient system. A Boston Consulting Group report forecasts the tokenized assets market to reach $16 trillion by 2030.

Securitize considers Spain’s sandbox environment a significant milestone, enabling the company to conduct real-world trials before securing essential licenses. This marks their inaugural trial in Europe, providing an opportunity to showcase that the success achieved in the USA can be replicated in the European market. 

Although Securitize’s authorization to issue tokenized securities in Spain is recent, the company already has a strong presence there, with a substantial part of its technology team being Spanish. Additionally, Banco Santander, a major financial institution, was an early investor in the firm. Moreover, Securitize has recently disclosed plans for expansion into the Asian market.

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Filed under: Bitcoin - @ August 7, 2023 1:10 pm