By George Ward
A private bank base in Switzerland, Cite Gestion, is set to tokenize its shares as it dives further into blockchain technology. Founded in 2009, the independent Swiss bank is pushing for blockchain technology adoption in a partnership with Taurus.
Tokenizing Shares
In a press release by the company, the move will be the first of its kind in the country as Cite Gestion will become the first private bank to issue ledger-based securities under Swiss law. Furthermore, the bank will collaborate with the digital asset platform, Taurus, to issue its tokenized shares.
In addition, the partnership will allow Cite Gestion to manage the smart contract used to build the stakes and perform the asset servicing for its securities. Financial institutions have jumped on the bandwagon of digitization of asset classes because it allows traditional finance (TradFi) players to attract investors via their use of blockchain technology.
Taurus believes digitizing private assets and securities is fast becoming the standard in the crypto industry. For example, an investment management company, Hamilton Lane (HLNE), recently revealed that it would tokenize three of its funds following an agreement with Securitize, the digital asset securities firm.
HLNE aims to make private market investments open to broader investors. Meanwhile, the announcement comes in the aftermath of a similar move by the investment behemoth KKR. In September 2022, KKR disclosed that it plans to tokenize one of its products on the Avalanche blockchain.
Cite Gestion’s tokenization of its shares aligns with the standards set out by the Capital Markets and Technology Association (CMTA), a Geneva-based non-profit organization. The partnership with Taurus and applying the CMTA guidelines will ensure adequate risk management, says Christophe Utelli, the deputy CEO of Cite Gestion.
Meanwhile, according to Cite Gestion, the banks’ tokens were developed using the CMTAT open-source smart contract created by the CMTA specifically designed for tokenizing securities assets.
Leading Institutional Tokenization Drive
Founded in 2018, Taurus obtained its securities license in 2022 from the Swiss Financial Market Supervisory Authority. The firm seeks to provide investors and banks with the means to trade several digital assets, including tokenized securities.
Since its inception in 2018, Taurus has been part of numerous tokenization projects involving 15 firms specializing in equity, private debt, and products from companies in Switzerland and some of Europe. Commenting on the partnership with Taurus, Utelli explained that Cite Gestion must become the first to take advantage of the new opportunities offered by the Swiss law.
Utelli further said that the country’s tokenization laws helped the bank to initiate its digitalized securities and to tokenize its shares. Recently, the TradFi sector has been accelerating its blockchain technology adoption to boost optimal operation and enhance efficiency.
Even though some regulators continue to draw the line between the interaction of cryptocurrency with the conventional financial system, TradFi has continued to adopt blockchain in its operations.