- Cité Gestion becomes the first private bank to issue tokenized shares.
- The private bank collaborates with Taurus, a digital assets firm, to issue and manage its tokenized shares.
- Taurus has helped over 15 companies across Switzerland and Europe to tokenize their securities since its inception in 2018.
Due to the advent of cryptography and web3 technologies, the payment industry has undergone a significant transformation. As a result, banks have been working to create a revolutionary payment infrastructure incorporating Web3 models to improve account confidentiality, prevent counterfeiting, and eliminate other forms of fraud.
Cité Gestion, a private Swiss bank, takes a significant step in the Web3 payment industry by tokenizing its shares, setting a new standard for the private banking sector. By recently tokenizing its shares, incorporating Taurus technology, and exploring blockchain-based payment alternatives, Swiss Bank Cité Gestion has set a new benchmark in the private banking industry.
Swiss Bank Makes History in Tokenization of Assets
Tokenization converts traditional assets like shares and securities into digital tokens that can be stored and transferred on the blockchain. Cité Gestion, an independent Swiss private bank since 2009, has utilized Taurus’ technology to tokenize its shares to provide its shareholders with more features and enhanced encryption.
In compliance with ledger-based securities under Swiss law, the move by Cité Gestion will be the first in the private banking industry to issue shares and securities in a tokenized form, according to the statement.
The press release confirming the partnership with digital asset firm Taurus also noted that, in addition to issuing tokenized shares, it would also manage the smart contract that generates the shares and perform asset servicing of its securities.
Private Banks Have begun to use Web3 technology
The buzz around tokenization in the payments world is heating up as it continues to gain the trust of financial institutions and provide the opportunity for Tradfi players to onboard more investors into the exciting new web3 world.
According to Taurus, “We believe that digitalizing private assets and securities are becoming the new standard in the digital asset industry.”
Investment management firm Hamilton Lane (HLNE) recently announced its plans to tokenize three of its funds in partnership with digital asset securities company Securitize to make private market investments more accessible to a broader set of investors. This announcement follows KKR’s announcement in September to tokenize its Health Care Strategic Growth Fund on Avalanche Network.
The independent bank explained that the tokenization process was carried out by the Capital Markets and Technology Association’s standards (CMTA), a Geneva-based non-profit organization.
The company also noted that the tokens were created using CMTAT, an open-source smart contract created by the CMTA specifically for tokenizing securities and recorded on Ethereum.
Christophe Utelli, Deputy CEO of Cité Gestion, noted, “Taurus and the application of the CMTA standards ensure that an adequate risk management framework is at the heart of the process. Therefore, it was critical for our bank to be among the first to take advantage of the new opportunities for digitalization of securities provided by Swiss law by tokenizing our shares.”
Cité Gestion hopes that tokenizing shares will make it easier for investors to trade shares and keep track of their holdings and ownership. This move by the private bank may also provide shareholders with enough liquidity and transparency to help them decide on an investment option.
Conclusion
Taurus received its securities license from the Swiss Financial Market Supervisory Authority last year. The crypto firm now aims to build a Web3 ecosystem by allowing investors and banks to enter the blockchain through tokenized securities. Tokenization of shares is a bold step in leading the crypto space to a more significant cause for Cité Gestion and the banking industry.
So far, the company has tokenized 15 companies covering equity and private debt and structured products from Swiss and European firms.
It is expected that other private banks will follow in Cité Gestion’s footsteps and create their own shares to grant the banking industry a Web3 shape, resulting in a more efficient and transparent way of trading shares that benefits investors and companies.
