Cité Gestion, an independent Swiss private bank founded in 2009, is using Taurus technology to tokenize its own shares as the bank delves deeper into blockchain technology.
The move will be the first by a private bank to issue shares as ledger-based securities under Swiss law, the company said in a press release. Cité will be partnering with digital assets firm Taurus to issue its tokenized shares as well as manage the smart contract that creates the shares and perform asset servicing of its securities, according to the statement.
Tokenization, or the digitization of various asset classes, has been a popular trend among financial institutions because it allows traditional finance (TradFi) players to attract more investors by using blockchain technology. “Taurus believes that digitization of private assets and securities is becoming the new standard in the digital asset industry," Taurus said in the statement.
Most recently, investment management firm Hamilton Lane (HLNE) said it will tokenize three of its funds in a partnership with digital asset securities company Securitize, with the aim of making private market investments available to a broader set of investors. The announcement followed a similar move from investment giant KKR, which announced plans in September to tokenize its Health Care Strategic Growth Fund on the Avalanche blockchain.
Tokenization of Cité Gestion’s shares was carried out in accordance with standards established by the Capital Markets and Technology Association (CMTA), a Geneva based not-for-profit organization, the bank said in the statement. “Taurus and the application of the CMTA standards ensure that an adequate risk management framework is at the heart of the process," said Christophe Utelli, deputy CEO of Cité Gestion.
The tokens were created using the CMTAT, an open-source smart contract published by the CMTA and specifically dedicated to the tokenization of securities, and recorded on Ethereum, the company said.
Taurus, founded in April 2018, obtained a securities license last year from the Swiss Financial Market Supervisory Authority to provide investors and banks the ability to trade a number of assets, including tokenized securities.
The company has been involved in the tokenization of 15 companies so far, covering equity, private debt, and structured products from firms in Switzerland as well as Europe.
“It was important for our bank to be among the first to take advantage of the new possibilities offered by Swiss law for the digitalization of securities by tokenizing our own shares,” Utelli said.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.