The tokenization of real assets? Philosopher's stone of finance

Switzerland increasingly at the forefront of tools to make the luxury and niche markets accessible to small and medium-sized investors

Tokenization: Asset tokenization represents an alternative and innovative way to obtain fractional ownership of an asset
Asset tokenization represents an alternative and innovative way to obtain fractional ownership of an asset

La Switzerland is unanimously considered a pioneering nation in the sector of cryptocurrency.
Already in 2013 in Red Cross country the first startups that intended to focus their business on were incorporated crypto.
At that time there was no legislation that guaranteed to work in full legal certainty, as digital currencies were still totally unknown, not only to the masses, but also to insiders.
La Confederation immediately positioned itself as an extremely innovative location and adopted a business-friendly approach towards Crypto startups, eager to establish themselves in the Alpine nation.
Le Swiss authorities they issued the first banking licenses for cryptobanks as early as 2015.
This has allowed startups in the sector Blockchain and Fintech to continue to establish themselves in Switzerland, leading to the birth of the "Crypto Valley".

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Tokenization: The city of Zug pioneered the Blockchain and Crypto scene in Switzerland and is still attracting new businesses in the sector
The city of Zug pioneered the Blockchain and Crypto scene in Switzerland and is still attracting new businesses in the sector

Since 2016, the City and Canton of Zug at the center of a "Crypto Valley" without equal in the world

The city of Zug pioneered the scene Blockchain and Crypto and is still attracting new companies in the sector, a circumstance that allows the Swiss market to be among the top three jurisdictions in the world in terms of innovation and security in thecrypto universe.
Let's think, for example, of the advanced cross-border payment system, or the security of the custody of crypto-assets at Swiss crypto-banks.
We also think of the many companies that develop applications based on Blockchain and the tokenization of real assets.
In 2016 the municipality of Zug decided to accept the Bitcoin as a means of payment for some services.
Since 2020, the cantonal tax authority has also allowed the population to pay their tax bills in Bitcoin ed Ethereum up to a maximum amount of 100.000 Swiss francs.

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Tokenization: the text of article 973d of the Swiss Confederation's Code of Obligations (in English)
The text of article 973d of the Swiss Confederation's Code of Obligations (in English)

Two years ago the "Law on Blockchain" and on "securities based on the distributed ledger"

Starting February 2021, XNUMX, the "Blockchain Law" of the Switzerland initially implemented the elements of the legislation on DLT (Distributed Ledger Technology), allowing for the introduction of a new category known as “distributed ledger-based securities”.
Distributed ledger-based securities as a new form of collateral have been incorporated into the Swiss Code of Obligations.
Article 973d defines securities based on the distributed ledger as a right loaded on a "ledger", in fact, which can only be enforced through the ledger itself.
So, according to theinnovative article 973d CO, if permitted by a company's articles of association, securities such as shares may be issued as registrar-based securities and "uploaded" to a Blockchain.
Instead of holding titles in paper or electronic format, there is therefore the option of uploading them digitally to a Blockchainwhich has several advantages.
Therefore, equity tokens contain exactly the same rights and obligations as “traditional” stocks.
Like a company's stocks and bonds, registry-based securities can be representative of physical assets in the real economy.

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Tokenization: The Swiss authorities issued the first banking licenses for cryptobanks as early as 2015.
The Swiss authorities issued the first banking licenses for cryptobanks as early as 2015.

There are numerous tax, visibility and internationalization advantages thanks to equity tokens

Asset tokenization is a common practice in the Swiss financial market.
It is legally guaranteed by existing legislation through the Federal Act on Financial Market Infrastructures and Market Conduct in Trading in Securities and Derivatives (abbreviated “FinfraG” from the German Bundesgesetz über die Finanzmarktinfrastrukturen und das Marktverhalten im Effekten- und Derivatehandel) of the Switzerland.
Traders can contractually link securities (bonds or stocks) to a token, so that the securities and the token cannot be transferred independently.
Through the tokenization of shares, companies and investors can obtain these benefits: create liquidity for their shares; create interest/visibility in the market, generating a potential appreciation of the shares themselves; making an investment accessible to the general public that was not previously accessible, boosting sectors of the economy that previously remained little known internationally; enjoy tax advantages, depending on the jurisdiction of residence, relating to the possession of the tokens.

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Tokenization: Blockchain is a data structure that consists of growing lists of ledgers, called "blocks" and distributed, securely linked together using cryptography
Blockchain is a data structure that consists of growing lists of ledgers, called “blocks” and distributed, securely linked together using cryptography

Investments in classic cars, collections of wines, art and more democratic and profitable watches

The same tokenization operation can be carried out with other types of real world assets, such as vintage cars, wine collections, various works of art and watches.
What do these assets have in common? They are illiquid and inaccessible to the general public.
How can an average investor bet on a Picasso, a highly prized nectar, a Patek Philippe, a private jet?
Through the asset tokenization operation, the asset is digitally divided into many small fractions of equal value.
So even the small investor can access the market.
The creation of liquidity underlying tokenization democratizes luxury markets, areas that very rarely generate capital losses.
The small investor therefore receives the tokens representing that asset in his wallet and can hold or resell them on a specific Crypto market in an onshore or offshore jurisdiction of his choice, similar to owning shares and selling them on a trading platform.
On the seller's side, the chances of selling an illiquid asset increase significantly compared to the possibility of having to find a single buyer in the luxury market.
Operation that requires more time, more resources and probably generates less revenue than tokenization.
Finally, we can evaluate an interesting tax aspect, which depends solely on the tax residence of the investor.
In fact, the holding of offshore tokens may not be taxed, either on the substance or on any capital gain…

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Tokenization: a cryptocurrency is a digital currency that, unlike traditional currencies, does not exist in physical form and is not controlled or managed by any central authority
A cryptocurrency is a digital currency which, unlike traditional currencies, does not exist in physical form and is not controlled or managed by any central authority