- CMTA's label certifies that the digital tokens comply with Swiss law and are based on secure technology.
- The certification label is expected to simplify the adoption of digital tokens in the real economy.
- Digital tokens offer a reliable efficient alternative to paper certificates or other means to document share ownership.
The CMTA has launched its first certification label, which will be available to companies that use digital tokens to represent their shares (digital shares). The label will provide assurance that the tokens validly represent shares under Swiss law, and rely on technology vetted by experts.
In 2020, Switzerland passed legislation to confirm that Swiss companies could use distributed ledger technologies to create digital tokens representing their shares, a process referred to as "tokenization". For tokenization to gain wider adoption, it needs to be easier for companies, investors, and banks to determine that digital shares are based on a sound legal and technology framework. The new certification label represents a critical step towards the mainstream use of the distributed ledger technology as a way to store and transfer financial instruments.
CMTA's certification label addresses this challenge by offering a straightforward way for companies to demonstrate that their digital token validly represents shares in compliance with Swiss law and uses reliable technology. To obtain the CMTA label, companies simply need to follow CMTA's share tokenization model and use compatible technology. They can then turn to a list of pre-approved technology providers and legal experts who will be able to issue the required confirmations for CMTA to issue the label. Companies who obtain the CMTA label will appear on a dedicated public webpage.
Jacques Iffland, Chairman of CMTA's Executive Committee and Partner at Lenz & Staehelin, explained: "The vast majority of companies still use paper share certificates and other unreliable means to document the ownership of their shares, which is a significant risk. For them, using digital tokens would be a significant leap forward, but this will become a reality only when tokenization becomes normal corporate practice. Our CMTA label is a key step towards this goal."
Dr. Jean-Philippe Aumasson, Expert Committee Chair of the CMTA, Cofounder of Taurus and renowned cryptography expert, said: "The distributed ledger technology is mature enough to be part of the everyday life of companies. I am excited to see the CMTA label come to life, but I am also looking forward to what we can build next – the beauty of our solution is that it can be applied to other types of instruments as well, such as debt and structured products."
CMTA's tokenization solution was launched at the "decentralized financial markets and standardization" event organized by CMTA in collaboration with 4T-DLT from digitalswitzerland.