It might seem counterintuitive, but liquidity is a key benefit for some tokenized securities issuances and a drawback for others. It depends on the asset class. That was one of the topics discussed by executives from BNY Mellon, BNP Paribas and others during a digital securities and funds panel at the Crypto Asset Conference this week.
Kurt Zeimers of BNP Paribas noted the benefits of DLT for fund distribution. Ireland and Luxembourg are the jurisdictions of choice for UCITS funds seeking distribution across Europe and worldwide. In contrast, German registered funds are only distributed in Germany. That’s likely to change with Germany’s recently enacted electronic securities act (eWpG) with the possibility of tokenizing fund shares. Now Germany’s so-called crypto securities can be registered on a DLT that is managed internationally.
BNY Mellon’s Benjamin Duve noted that, at a high level, there are two sets of benefits to tokenization. On the one hand, there are efficiencies and improved operating models, and on the “other side is reach, distribution, depending on the asset class there’s liquidity, if you talk about private asset or example”.
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