The U.S.-based trading platform is set to become the first to issue and trade tokenized assets in both the U.S. and the EU, and will operate under the new DLT pilot regime.
Digital asset trading platform Securitize has begun tokenizing equity in the Spanish real estate investment trust Mancipi Partners, it announced on June 27. The firm expects to launch secondary trading on the Avalanche blockchain in September.
Securitize plans to carry out the first natively tokenized equity issuance under the European Union’s pilot regime for distributed ledger technology supervised by the European Securities Market Authority. The pilot regime was introduced in March.
The company will undergo a six-month sandbox period under the supervision of Spain’s National Securities Market Commission, known by its Spanish acronym CNMV. In addition, it must receive regulatory approval under the pilot regime to allow it to issue, manage and trade tokenized securities in Spain and throughout the EU.
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Securitize is already registered with the United States Securities and Exchange Commission as a stock transfer agent and alternative trading system, and is a member of the Financial Industry Regulatory Authority. Securitize CEO Carlos Domingo said in a statement:
“Securitize is now the first firm to be able to issue and trade tokenized securities in both the U.S. and Europe.”
Securitize partnered with asset manager KKR to tokenize an interest in its Health Care Strategic Growth Fund II in September 2022. It announced a partnership with SBI Digital Markets, a Singapore-based subsidiary of Japan’s SBI Digital Asset Holdings, in October 2022, shortly after SBI Digital Markets was granted a license by the Monetary Authority of Singapore.
Though most value is created in private capital markets, they remain notoriously impenetrable, illiquid and inefficient. At Securitize, we’re making #privatemarkets more accessible, and securities more productive.
— Securitize (@Securitize) July 21, 2023
Listen to @carlosdomingo's full interview with @fintechfrank for… pic.twitter.com/DquglSYFuw
Tokenization makes private equity investment more accessible to retail investors and improves liquidity by making the tokenized assets tradable on secondary markets. It also benefits businesses.
“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,” Domingo said.
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