Euronext invests €5 million in tokenisation platform

Tokeny Solutions provides a platform to banks, asset managers, funds and distributors to issue, manage and transfer tokenised securities.

Pan-European exchange operator Euronext has invested a total €5 million in a tokenisation platform that is betting on widespread tokenisation of traditional financial assets.

The deal means that Euronext now owns a 23.5% stake in Luxembourg-based FinTech firm, Tokeny Solutions, as well as strong governance reputation of the company.

Tokeny Solutions will feed its expertise to Liquidshare, Euronext’s joint venture with BNP Paribas, Société Générale, Euroclear and other firms across Europe, which focuses on blockchain driven post-trade solutions for small and medium sized enterprises.

Founded in 2017, Tokeny Solutions provides asset managers, investment banks, distributors and funds with a means of issuing, managing and transferring tokenised securities on a public blockchain. The firm’s T-REX protocol integrates compliance requirements into the smart contracts to create tokens that are compliant by design.

“Convinced of the long-term impact of tokenisation on the financial industry, Euronext is committed to developing solutions that continue to serve its clients and ecosystem going forward,” Euronext said in a statement on the investment.

Tokenised securities, traded on a digital ledger, have been hailed as the future of trading new and existing assets by a number of major financial institutions such as Standard Chartered, State Street and SIX Securities Services.

Earlier this year, DTCC published a set of guidelines for the post-trade processing of tokenised securities in the form of a whitepaper to outline the responsibilities that should be undertaken to enhance security for token platforms.

The principles include demonstrating a legal basis for providing post-trade services for crypto assets, having an identifiable governance structure, procedures for risk management and final settlement, demonstrating resilience, and having issuance, custody and asset servicing capabilities.