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Deutsche Börse backed 360X issues regulated security token for music royalties


360X Music has issued a security token for music royalties in association with Germany’s music rights management society GEMA. The blockchain-based tokens are for royalties relating to compositions by Hans Günter Wagener, the German film score composer. Parent company 360X is a digital assets startup backed by Commerzbank and the Deutsche Börse. It provides a BaFin-regulated marketplace for tokenized music, art and real estate. 

By tokenizing music royalties, authors can unlock early value in their creations rather than waiting for months and years to receive income. There are pros and cons. For example, if a track is far more popular than expected, the musician would have been better off waiting to receive the royalties. However, the artist doesn’t necessarily have to sell the token. In the future, musicians could use these royalty tokens to borrow against future earnings.

“The first token for the music industry issued jointly by GEMA and 360X Music is an important milestone on our way to improving the economic situation of lyricists, composers and publishers and ensuring that they continue to have control over their rights,” said Dr Harald Heker, CEO at GEMA.

These security tokens are an investment and quite different from buying a music NFT closer to purchasing a track to listen to. Most of the NFT money usually goes directly to the artist rather than a label, as when buying a track. 360X Music Group also has a web3 subsidiary, twelve x twelve (a nod to vinyl measurements) that’s involve in NFTs.

“In the future, investors will be able to invest directly in artists, authors or publishers and participate in their success,” said Jan Denecke, CEO of 360X Music. “Our goal is to enable fans as well as investors to safely invest in the music they love. This way, they will also be able to participate in the success of their favourite artists.”

The token issuance platform enables instant settlement in Euros. We’ve asked about which blockchain technology is used but didn’t receive a response in time for publication.

As a financial asset, security tokens are pretty distinctive. However, blockchain has been used elsewhere for royalties. Canadian firm GuildOne launched a blockchain music royalty solution, and Tech Mahindra has a blockchain-based royalties platform. GEMA’s French counterpart SACEM is using blockchain for IP protection – to prove the author owns the rights – rather than for royalties. 

Image Copyright: itana / 123rf