Tokenization, explained

Every asset tokenized

As digitalization takes on the financial industry, tokenization becomes an integral part of the capital market of tomorrow. Using the blockchain techology, tokenization securitizes of assets – in a digital manner. This opens up vast possibilities for both assets and investors and will shape the future of capital markets all together.  

What is tokenization?

Put simply, tokenization is the securitization of assets via blockchain. Real assets are digitally represented using the blockchain technology, including rights and obligations linked to the associated value. To map an asset on the blockchain, so-called security tokens are issued. They represent a certain proportion of the initial value. They can represent regulated financial instruments like equity, bonds or funds, but als tangible assets like real estate.

A digital program, called smart contract, maps the the rights and obligations of the legal contract, and is represented by a token. The token can be transferred digitally – which means that the underlying assets can be transferred. This opens up vast possibilities for any financial party: investors, issuers and intermediaries like platforms. 

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Steps of a tokenization

In tokenization, an asset is legally linked to a digital representation (token) on the blockchain. With our Tokenization-as-a-Service infrastructure, no special blockchain know-how is required. You can either use our web-based Cashlink Studio to tokenize assets. Alternatively, you can connect our Tokenization API to your existing system. Our team will be happy to advise you and guide you through the entire process.

1. Pre-Issuance

2. Issuance

3. Post-Issuance

4. Trading

Always included

No limit for tokenization

“As a securities trading bank, we see great potential of blockchain technology to revolutionize the securities business. This is also made clear by the federal government’s blockchain strategy. We are pleased to note that Germany is playing a pioneering role here. Our pilot project with Cashlink shows that the technology is already applicable in practice and offers many advantages. In the long term, digital securities offer many more possibilities than today, such as the mapping of assets that could not previously be securitized.”

says Boris Ziganke, COO of Bankhaus Scheich Wertpapierspezialist AG

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Tokenization offers new possibilities for a varieties of industries and asset classes. Contact our team of experts to find out how you can profit from tokenization and everything it has to offer. Solutions specifically tailored to your operating industry are available. 

Advantages of tokenization

Starting today, companies, investment banks, asset managers, funds, stock exchanges and investment platforms are shifting towards utilizing the power of tokenization. The advantages are manifold: faster processes due to digitalization, fewer intermediaries which lower cost and increase efficiency, and global transferability are just a few examples. Be among the pioniers of your industry and profit from the benefits of tokenization today!

65% lower costs

By representing securities on a blockchain, many expensive intermediate parties become redundant. Additionally, process efficiencies can be realized which leads to overall lower costs in the value chain compared to traditional securities transactions.

99% faster settlement

The blockchain technology digitizes existing, often still paper-based processes. The speed of transactions increases considerably through the use of tokenized securities.

24/7 global transferability

The digitization of securities drastically simplifies the transfer of assets. Assets that were previously illiquid can now be easily transferred 24/7 worldwide.

100% more transparency

Transactions are stored unchangeably and transparently on the blockchain and are securely traceable at all times.

Questions?

Our team of experts is happy to help you on your journey to tokenization. Get in touch with us now to find out more about how you can profit from this technology!

Our tokenization solution

Cashlink offers a compliable software-as-a-service soultion for tokenization. It offers end-to-end integration for different industry and company types that covers distribution, custody, registry management and trading on secondary markets. All software modules can be white-labelled or accessed via our simple API.

Easy integration via our powerful APIs​ or access via whitelabel

No technical knowledge required – software is readily available

Setup is specifically tailored to individual customers

Integration is flexible and individual due to modular software components

What does tokenization mean and what is a token?

Bafin defines tokenization as “the digital reproduction of an asset or value including the rights and obligations attached to it as well as the transferability this makes possible”. The digital representation is usually implemented on a blockchain. To map an asset on a blockchain, so-called tokens are issued. Each of these tokens represents a certain part of the mapped value. For this purpose, a contract is usually drawn up, which defines which rights and obligations result from a token. The tokens can be transferred completely digital to another party. This also transfers all rights and obligations from the contract. By tokenization, an asset can be transferred completely digitally. If an asset becomes transferable and is largely standardized, the BaFin considers it to be a security in the regulatory sense. The tokenized assets are therefore also called digital securities.

Which assets can be tokenized?

In principle, almost any asset can be tokenized. As a rule, the legal situation in the jurisdiction of the issuing party and the structuring of the security is decisive.

Tokenization of corporate investments

In Germany, company investments are currently tokenized predominantly in the form of a profit participation right. Profit participation rights are very flexible and can completely map a company participation economically. A tokenized share or GmbH share is planned by the German government in its block chain strategy, but has not yet been implemented. In other jurisdictions, such as Lichtenstein, company shares can already be completely tokenized.

Tokenization of real estate

Real estate can be tokenized via a so-called SPV (special-purpose vehicle). For this purpose, a company is set up whose purpose is to hold the real estate. The shares of this company are tokenized, making shares in the property transferable.

Tokenization of tangible assets

The tokenization of tangible assets, e.g. art, is usually very similar to the tokenization of real estate. For this purpose, the tangible assets are transferred to an SPV (special-purpose vehicle), which is then tokenized.

Tokenization of (existing) securities

Even existing securities, e.g. a share, can be tokenized. By means of a legal structure similar to a tracker certificate, the value of an existing security can be mapped directly.

How does tokenization work?

In tokenization, an asset is legally linked to a digital representation (token) on a blockchain. With our Tokenization-as-a-Service infrastructure, no special blockchain know-how is required. You can either use our web-based Cashlink Studio to tokenize assets. Alternatively, you can connect our Tokenization API to your existing system.Our team will be happy to advise you and guide you through the complete process.