Taurus, a fintech firm backed by Deutsche Bank, has received the required regulatory nod from the Swiss Financial Market Supervisory Authority (FINMA) to offer tokenized securities to retail investors. The firm can now provide access to its financial services and TDX marketplace to retail users, in a move hailed by observers as “forward-thinking.”
In a January 23, 2024, statement announcing the development, Taurus revealed retail users can now create accounts on its TDX marketplace to access and trade digital assets and tokenized securities. Taurus also announced the onboarding of prominent Swiss companies issuing tokenized shares to retail users of the TDX platform. Some securities issuers mentioned in the announcement include la Mobiliere, Investis Group, Qoqa, SCCF, Swissroc, and Teylor. Additionally, the new issuers will mostly list tokenized shares on TDX, allowing retail investors to access them in a regulated and secure manner.
Why the Approval is Significant
Before FINMA approved the Taurus bid to offer tokenized securities to retail investors, individuals could not simply create trading accounts on TDX to purchase tokenized securities, at least not securely. However, the approval changes everything. For one, it opens the TDX marketplace to retail users, allowing them to trade regulated digital securities with government approval.
Also, companies can now access both primary and secondary markets, according to the Taurus announcement, giving them access to a flexible trading environment that lets them manage their digital securities in real time. The influx of significant market players to TDX against the backdrop of the approval is another milestone, as it allows users to access a revolutionary asset class without compromising on their desired stocks.
“Our core belief at Taurus is that private markets 2.0 shall be digitized, so that buying a private security becomes as easy as buying a book on Amazon,” Yann Isola (TDX Head of Product) said in part while commenting on the diverse selection of securities issuers on TDX.
Swiss Giants Flock to TDX
Following the green light for Taurus to launch its TDX marketplace to retail users in Switzerland, prominent companies have flocked to the digital securities exchange in a bid to offer their tokenized digital assets in the country’s first secure and regulated environment. Among Taurus’s diverse clients is Mobiliere Group, an insurance company (currently) with one-third of all Swiss households and companies as customers, having an annual premium volume of around 4.5 billion Swiss Francs as of the end of 2022.
Swissroc Group is another major institutional partner with over 250 building sites and 1 billion Swiss Francs in assets. Commenting on its partnership with Taurus, Harrison Mean, Head of Strategy at the Swissroc Group, expressed his willingness (by the firm) to help pioneer real estate tokenization.
Commodity investment firm SCCF and Swiss tech company Teylor AG are also bringing tokenized securities to TDX, with Teylor CEO and founder Patrick Stauble looking to make corporate lending faster, easier, and more efficient using technology and the Taurus regulated exchange. “Partnering with Taurus and launching the Teylor Token for professional investors to create liquidity for the private SME debt asset class is a key milestone towards this goal,” Patrick said, unveiling plans to create a unique token to list on the exchange.
Over the next few months, other high-profile firms should bring tokenized securities to the TDX marketplace, offering retail and institutional users an even better selection of digital securities they can trade in full compliance with relevant Swiss laws and regulations.
What is Next?
While tokenized securities represent an innovation over regular securities, the average retail investor likely will not notice any difference. Since the new digital asset class can mimic the behavior of real securities, trading shares or stocks on TDX should feel completely normal, like a regular stock exchange platform. This tokenized securities innovation (somewhat) resembles spot Bitcoin ETFs, an asset class approved by the SEC for retail US investors earlier this year.
However, while tokenized securities, like those selling on Taurus, take regular securities or stocks and turn them into tokens, spot Bitcoin ETFs convert Bitcoin tokens to regular shares for listing on stock exchanges, allowing stockbrokers to bet on the price movements of Bitcoin without actually holding the cryptocurrency.