There is a new trend in the financial world, the tokenization of assets. With tokenization, digital images of assets are mapped in the form of tokens via the so-called blockchain. This offers many advantages such as faster processing or lower costs. Many companies want to be right at the front. Some people quickly dismiss this as new hype. But according to the author, it is more a long-term development that must be understood in a technological-legal nexus. When it comes to the question of what tokens are, in his opinion different perspectives move in the field of tension between technology and the legal framework. Token assets have been officially defined as a financial instrument and are therefore subject to financial market regulation, which closed a certain gap.
The cardano dex platform concept of security is a reciprocal development of economic innovations and the legal framework. This is where the debate about the tokenization of assets follows seamlessly. In contrast to statements that “digital” tokenization would revolutionize the entire financial industry and fears that this will all be just another new marketing hype, “digital tokens” should be understood as part of the long-term development in a technological-legal. In the market economy sense, this is part of a search process for the most efficient solutions possible in an open-ended debate.
The interplay between technology and law, however, requires an unbiased view and an understanding of the continuity of innovations.
Tokenization is an innovation?
Neither a purely technological view from the perspective of Distributed Ledger Technology (DLT or “Blockchain”) or a belief in a current disruption of the securities markets and securities settlement can do justice to this continuity of development without the context of the historical development of securitization, dematerialization and digital representation will.
With the differentiation of the earlier mythical-ubiquitous “blockchain” into different service providers with clear roles and commercial interests, there is also a transition to the perspective of supervisory law, which regulates the various roles and their responsibilities in the financial market. First: Technological implementation is a downstream issue that does not determine the nature of security. Second: In general, a regime for securities is defined as “transferable securities” in the regulatory context. On the one hand, this must be distinguished from the civil law regulations, which are still fragmented. And finally, thirdly: The difference between pure primary market transactions and the entire secondary market process chain is decisive for the question of efficiency if one does not want to limit oneself to the regulatory niches already mentioned for small issue volumes.
