Tokenized Securities Law in Switzerland Opens a New Chapter for Digital Assets

To commemorate the occasion, Signum and SEBA are both regulated crypto banks.

Switzerland allows tokenized securities to trade on a blockchain. It has the same legal status as traditional assets. Monday was the effective date of the new law.

Swiss legislators decided not to create an entirely new system, but instead modified existing legislation to incorporate specific features of distributed ledger tech (DLT). DLT amendments recognize tokenized assets as a new type of asset. Each new investor's legal ownership rights are automatically transferred via blockchain.

Alexander Vogel, a partner in the Swiss law firm Meyerlustenberger Lachenal, stated that "previously, you had uncertificated right there that needed to be assigned, and that was a lot of smart people looking at how that could possibly be done on-chain." With these registered rights, you can be certain that you have legal certainty. If the rights are transferred properly on a blockchain, then the new owner who has them in his/her wallet is the owner.

This law change cements Switzerland's position as the best jurisdiction for crypto (only Singapore is on a comparable level). It's not a one-size-fits-all solution. It takes time and effort to obtain the required license from Swiss regulators.

Sygnum and SEBA are two of Switzerland's regulated crypto banks. They chose to celebrate the occasion by issuing tokenized security. Sygnum today announced that it had tokenized a selection of premium wines from Fine Wine Capital AG.

SEBA will issue Series B equity shares in Ethereum ERC-20 tokens. According to a press release, the move will provide "seamless connectivity" for trading and liquidity at future digital liquidity venues that are internationally recognized.

Matthew Alexander, Head of Digital Corporate Finance and Asset Tokenization at SEBA Bank spoke about the new legal wrapper to tokenized assets.

It's a true blockchain-based digital twin to traditional security. Switzerland's strategy is a bridge to this new digital economy. It also helps with the transition from traditional fiat banking and security assurance.

SDX skates on

Alexander stated that any Swiss issuer could benefit from the new laws. This includes UBS, the Swiss banking giant, which issues primary securities on SIX. SIX is the country's stock exchange.

The DLT law, it seems, will be a catalyst for the SIX digital markets, SDX to get its services running and ready to serve this emerging market.

Alexander, SEBA, stated that SDX, the digital twin to the Swiss stock exchange, was still being constructed and had been for a while. It will host these digital twins, and the whole transition is happening."

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SDX may still be missing something if it fails to get its skates on. Sygnum and SEBA both have connections to Singapore and will act as market makers for DBS Bank's digital exchange.

Vogel, MLL, agreed that the new DLT legal foundations from Switzerland would be attractive to Singapore.

Vogel stated that it will give Vogel more legal certainty. Vogel stated that even though the asset is traded in a foreign country, investors would still be able to see the underlying rights to make an investment in the asset.