Digital Assets Unlocked | Tokeny

We see more and more interest from asset managers. They are looking for tokenizing funds, particularly money market funds and alternative funds. Money market funds can be used as collateral or cash on-chain. Alternative assets benefit from a digital infrastructure. The full lifecycle can be managed on-chain (subscription, redemptions, and capital calls, transfers, etc.) and distribution is facilitated by the native blockchain interoperability.

It is positive for the industry as it provides regulatory clarity. It is important to note that security tokens are not in the MiCA scope. Security tokens have to be compliant with MiFID II.  Security tokens issuers therefore must enforce the same compliance rules required in MiFID II. With the right smart contract standard like ERC-3643, the permissioned token standard, it can be done. Issuing utility tokens and stablecoins will be harder than issuing security tokens due to the heavy requirements in MiCA. Only large entities will be able to issue these assets in Europe, smaller ones might have to do it outside of Europe, hindering the market from growing. 

It is one of the best jurisdictions to tokenize financial instruments. Regulation has been clear here since 2021 for tokenization The ecosystem is formed, and the process is very streamlined. Our clients outside of Luxembourg can manage to open their new entity here to tokenize funds within a matter of a few weeks. The fund industry will lead the tokenization transition, and here, it is the hub of investment fund centers, the second largest in the world after the US. Luxembourg is posed as the most suitable place for tokenization of funds.