Tokenestate: Security Token in Switzerland

Welcome to Digital Security Frontier Vision: The Voice of the Core Builders from Global Digital Security Industry #26.

In this interview, we are welcoming Vincent Trouche from Tokenestate, a leading security token issuance platform in Switzerland, which dedicated to real estate and SMEs. Over the past four years, Vincent has launched startups and products using emerging technologies ranging from Virtual Reality to the Internet of Things.

“I am an entrepreneur who believes in the transformational nature of the blockchain, and in its potential to make investing faster, easier and cheaper.”

— — Vincent Trouche,CEO of Tokenestate

Enjoy the Interview!

1. What do most people think about STO in Switzerland?

STOs are widely perceived as the ‘new normal’ to finance blockchain companies, and a desirable alternative to conducting ICOs. With STOs we have the best of both worlds: the efficiency and transparency of the blockchain, and the safety granted by classic financial securities.

2. In Switzerland, what is the general compliance process for security tokens?

Swiss regulation is ‘technology neutral’. It doesn’t matter if a financial security is being represented with a piece of paper or a blockchain ‘token’. As would be the case with a classic security, Issuers are requested to comply with applicable regulation, which includes securities regulation and anti-money laundering regulation. We at Tokenestate have developed a white label solution enabling issuing companies to sell Security Tokens at scale to investors in Switzerland and throughout the world. We’ve integrated Swiss financial intermediaries, Swiss banks and designed a ‘LegalTech’ process to accept funds from investors participating in STOs.

3. There are many types of assets suitable for STO. Why do you focus on real estate?

In finance, the biggest problem we need to solve is real estate investing. That’s the elephant in the room. Real estate is the biggest asset class there is, and most of it is illiquid and inaccessible to retail investors. We believe that investors anywhere in the world should be able to invest in real estate internationally, with no minimum amount, and from their smartphone. That’s what we’re working on, and STOs are key to achieving this objective.

4. At the end of 2018, STO has widespread attention in the U.S, Europe, Asia, and other places. Could you please introduce the first case on Tokenestate in November 2018?

Tokenestate is one of the first companies in Switzerland to have used blockchain-based tokens to represent ‘Swiss ordinary shares’. We successfully conducted a first Security Token transaction on the Tokenestate platform in November 2018, as a demonstration of our expertise with Security Tokens. That led us to conduct our first STO for a Swiss startup in August 2019.

5. What is the current development of that security token platform?

Today, Tokenestate is the most advanced STO platform available in Switzerland. Our solution is combining legally sanctioned processes, Switzerland banks and financial intermediaries, and top-of-the-line User Interface (UX). We’re also providing issuers with the required advice to structure and conduct their STO.

6. Where do most of the real estate companies that work with Tokenestate come from?

As of today, Tokenestate is working with its partner and strategic investor Swissroc, a Geneva-based real estate developer, to issue its first real estate token. Swiss real estate is a very attractive and secure investment in the current volatile economic environment. For our next projects, we’re working into EU real estate development opportunities, as well as in other geographies, such as the UAE and Asia.

7. In fact, from our observation of STO market in China, some Chinese real estate assets also hope to issue STO overseas. Any suggestions for them?

The Chinese real estate market is currently very difficult to access for Swiss + EU investors. It does make sense to structure a real estate investment there by means of an STO. Should Chinese real estate asset managers be willing to raise financing overseas, one way to do is to structure the STO through a Swiss legal entity, which will be issuing the Security Tokens.

8. Many people think that the biggest problem of the digital security industry is the lack of liquidity. As an early industry builder, how do Tokenestate solve this problem?

I absolutely agree that the biggest problem with Security Tokens is the lack of liquidity. And the reason is because Security Tokens are regulated instruments, which cannot be listed on unregulated exchanges such as crypto exchanges. We’re working with our Swiss partners to permit the exchange of Security Tokens, as soon as licenses are being handed out by FINMA, the Swiss financial regulator. FINMA is widely expected to grant licenses enabling the exchange of security tokens by Q1 2020.

9. How does Tokenestate view the Asian market? What types of potential investors are you communicate within Asia,Institutions or individuals?

Asia is the biggest crowdfunding market, and the biggest ICO market. It is clear to us that the region as a whole as tremendous potential when it comes to STOs. Where communicating to both individual investors and institutions. With our STO platform, we can now onboard investors coming from either categories, and from a large number of jurisdictions. We know that Asian investors have high level of interest for real estate investments, especially hard to reach investments in places such as Switzerland or the EU.

10. What is Tokenestate’s next plan? Is there anything else Tokenestate would like to share with Asian readers?

Tokenestate is a recognized Swiss pioneer in the first of Security Tokens. Today we’re conducting an STO to finance the development of our business. That’s the opportunity for savvy individuals and institutions to become investors in the company at a very attractive valuation.

  • Check Chinese version of this interview here

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