Securitize, an asset tokenization firm, has announced the issuance of the first tokenized equities under the European Union’s pilot regime for digital assets. The tokens, issued via the smart contract network Avalanche (AVAX), represent equity in Spanish real estate investment trust Mancipi Partners, supervised by Spain’s securities regulator (CNMV). Trading with these equity tokens on secondary markets is set to begin in September.
European businesses will be a major beneficiary of this innovation, giving businesses a new way to raise capital through primary capital raises, and obtain potential tax benefits and liquidity through secondary trading, said Carlos Domingo, co-founder and CEO of Securitize.
The tokenization of investment products such as private equity and debt on blockchain applications is becoming increasingly popular, with Bank of America (BAC) predicting that the market for tokenized assets could reach $16 trillion by 2030. Last year, Securitize tokenized investment funds of asset managers Hamilton Lane and KKR in the U.S. and entered Spain’s regulatory test environment for digital assets.
The issuance of these tokenized equities is the first under the EU’s Distributed Ledger Technology (DLT) pilot regime, which was designed to create a regulated environment for trading securities such as equities and bonds using blockchain technology. Securitize is hoping to receive licenses to issue, manage, and trade tokenized securities in Spain and throughout the EU after completing a roughly six-month test period.