Set up the first Italian ecosystem for the issue and placement of Security Tokens for the Alternative Investment market.
The mission of the initiative was to create a platform for the management of the entire Security Token life cycle, from issuance to post-sale management. The mission was promoted by CeTIF - Università Cattolica, Reply and Fondazione Cariverona, with the legal support of Chiomenti and the fiscal support of Linklaters.
The Security Token & Alternative Investment platform was developed on top of the Hyperledger BESU protocol, which enabled the creation of a private Ethereum network with zero transaction fees. Since Hyperledger BESU is fully compatible with the Ethereum Virtual Machine (EVM), it is compatible with smart contracts and consequently with tokens developed on Ethereum or any layer 2 protocol.
The platform has been developed to manage the entire life cycle of Security Token issuance, i.e. the phase of issuance and primary placement of the Token and the recording of any events related to real-estate assets. Finally, a module for the management of secondary transfers between investors has also been developed.
Within this sandbox (which finished at the end of 2021), Real Estate is the first type of asset class to be tested with the issuance of a Security Token. In Italy, this asset class has reached a market cap of over 7.89 Trillion Euro (2020).
BPER Banca, Banca Generali, Banca Mediolanum, Reale Mutua and Iccrea actively participated in this first testing phase.
Participants in the role of Originators (owners of the assets), Advisors/Collectors, as well as commercial and investment banks, property managers, and institutional and retail investors were able to use the platform to test the benefits and business value generated by tokenization with DLT/blockchain technology.
The main benefits, tested and confirmed during the pilot phase of the trial included:
Benefits for end users in terms of quality of service and end user protection thanks to the reduction of entry barriers guaranteed by the ability to fractionalize asset classes that today require high entry amounts
Increased operational efficiencies through smart contract automation (for example through delivery versus payment automation).
Reduced compliance and operational risks thanks to the inclusion of compliance rules in the token, strengthening correspondence between the investor's profile and the type of investment subscribed to.
Leveraging on the experience gained and the assets developed, the work group aims to achieve two main objectives during the course of 2022:
Carry out the first real Security Token issuance in Italy by exploiting the regulatory spaces which have been specifically granted (i.e., Regulatory Sandbox MEF/Consob/BdI and EU Pilot Regime for DLT Infrastructure)
Extend the analysis and testing to other asset classes in addition to Real Estate.