VP Bank Says “Pioneering” Tokenisation Trend

VP Bank is the first in Liechtenstein to tokenise a work of art and says it is “trailblazing” more asset management opportunities in the space.


As tokenization continues to light up the artworld and other
possibilities, Liechtenstein’s VP Bank has joined the
country’s national blockchain register in a bid to offer clients
a wider range of digital assets solutions.


The regulation which introduced last year, commonly known as the
Blockchain Act, requires any blockchain company or entity
offering cryptocurrencies to register for approval. The measure
has been welcomed as a bold and broad framework, allowing
anything from music and software rights to trademarks, patents
and more tangible commodities to be tokenised as well as
providing a level of legal certainty for providers keen to expand
digital assets services.


Those approved by the registry can become a token creator and
custodian. VP Bank says that it is the first institution
nationally to tokenise a physical artwork on the blockchain since
gaining its approval, and the first to offer a host of extended
services for owners and administrators working in the art market.


Like many of its private banking peers, it is keen to shore up
credibility for tokenizing assets and carve out more ownership
opportunities in the $50 billion global art market.


Leonardo da Vinci’s “Salvator Mundi” is the most expensive
purchase to date fetching $450 million in 2017. Tangible asset
deals of this magnitude come with their own challenges, including
a limited number of potential owners, high administrative costs,
and the headaches associated with transporting and storing
high-value works.


VP’s CEO Paul Arni says the bank”s “digital mapping” of real
assets is a response to growing need, adding: “I am pleased that
we are playing a pioneering role in this area.”


In practice this “mapping” gives the bank authority to register
ownership claims of real assets digitally on the blockchain and
store them as tokens in an efficient and cost-effective manner.
The benefits to art galleries, museums and foundations comes from
giving clients a unitary overview of their assets and full
transparency of any shared ownership interests that are easily
viewed in their asset statements or online banking, VP said.


Those embracing art tokenisation authenticated on the blockchain
believe that it will make it easier for patrons to own fractions
of works and collections, bring more diverse art into the
marketplace, and generally widen its appeal as an asset class.
The sector has traditionally operated with more opacity than
regulators would like, exposing the market to forgeries and
fending off money laundering concerns. On the flip side, the boom
earlier this year in non-fungible tokens capped by the $69
million Christie’s NFT sale, suggests that the early hype has
attracted its fair share of speculators and crypto-showboaters,
and needs to gain wider acceptance and understanding.


More mundanely, VP Bank says that having regulated oversight of
tokenised assets will help its core business with intermediaries
– for example, in succession planning when real assets have to be
divided.


“We are acting as a trailblazer and creating new and secure asset
management opportunities for our clients,” Thomas von
Hohenhau, head of client solutions, said. “The token economy also
underscores the systematic and forward-looking focus of our
service range,” he said.


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