Securitize is broadening its horizons beyond the U.S., kicking off the issuance of tokenized securities in the bloc.
This move follows the firm's successful entry into the Spanish General Secretariat of the Treasury and International Finance's test environment, a sandbox of sorts for digital asset securities.
Tokenization refers to turning more traditional financial assets, such as stocks and bonds, and issuing them on a blockchain.
Expected to drop costs and improve efficiency, the trend has even earned backing from BlackRock CEO Larry Fink who declared that “the next generation for markets, the next generation for securities, will be tokenization of securities.”
"This is a pivotal moment for us because we have been working tirelessly to obtain the same kind of licenses in Europe that we have in the USA,” CEO of Securitize Europe Brokerage and Markets Amparo Garcia Flores told Decrypt. “This would give us a comprehensive overview of both sides of the Atlantic."
Through its subsidiaries, Securitize is already registered in the U.S. as a stock transfer agent, broker-dealer, alternative trading system, and exempt reporting advisor.
Securitize has already initiated the issuance of tokens representing equity in the Spanish real estate investment trust, Mancipi Partners. This process involves investor onboarding, share issuance, and cap table management, all under the vigilant supervision of the Spanish CNMV supervisor.
The shares are tokenized on the Avalanche blockchain, and secondary trading of these tokenized shares is expected to commence in September.
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Spain’s sandbox environment is a crucial step for Securitize, as it allows the company to conduct real-world trials before obtaining the necessary licenses.
This is their first trial in Europe, and offers an opportunity to demonstrate that its success in the USA can be replicated in Europe.
“This is not just theoretical work; we are proving that what we have in the USA is feasible in Europe,” Flores said. “This means we can open our market to both sides of the Atlantic, effectively doubling the size of our business and the opportunities for issuers in Europe who previously did not have the same opportunities as their American counterparts."
The services they offer in the USA cover the full lifecycle of a security token, from issuance to capital increases, servicing those tokens in terms of dividends, shareholder meetings, redemptions, and the trading of those securities in a secondary market.
When asked about the advantages between tokenized and traditional capital markets, Flores highlighted the continuous full traceability of securities, cost efficiency due to fewer intermediaries, and direct market access for retail investors.
While the approval to issue tokenized securities in Spain is a recent achievement, Securitize already has a strong presence in the country. Much of its technology team is Spanish, and Banco Santander was an early investor in the firm.
"We are moving in the right direction, working closely with regulators,” Flores told Decrypt. “This is a big opportunity for us, and we look forward to having the licenses granted. While we will be based in Spain, we aim to cover the whole of Europe with a European passport, making this a pivotal moment for us."