The CMTA Token (CMTAT) is an open standard for smart contracts designed specifically for the tokenization of financial instruments. It is a framework that defines necessary and optional functions that can be used for tokenizing financial instruments such as equity, debt and structured products.

It is not a token that can be bought and sold but rather a set of definitions to create such tokens.

A digital token is typically defined by a computer program called a smart contract, which runs atop a DLT platform such as the Ethereum or Tezos blockchains. The smart contract program of a token is deployed by the party issuing it, smart contract functions are computed by transaction issuers, and said functions and their results are verified by nodes of the blockchain network. A smart contract allows the token to exist and to "behave" as intended by its issuer.

A smart contract is not a contract under the classical legal definition, but a program that executes itself according to the logic defined by its source code and by its input arguments. For example, smart contracts allow their issuer to create ("mint") new tokens, destroy ("burn") existing tokens, and can automatically enforce transfer restrictions or execute corporate actions.

The CMTAT is published by the Capital Markets and Technology Association (CMTA). CMTA’s members agreed that the industry needed a standard smart contract that could provide the functionality to tokenize financial products in compliance with local regulations. The CMTAT functional specifications were defined to be compliant with Swiss law.

The CMTAT was initially developed by a working group of CMTA's Technical Committee that included members from Atpar, Bitcoin Suisse, Blockchain Innovation Group, Hypothekarbank Lenzburg, Lenz & Staehelin, Metaco, Mt Pelerin, SEBA, Swissquote, Sygnum, Taurus, and the Tezos Foundation, with the support of ABDK, a leading team in smart contract security.

The CMTAT was developed on the premise that the digital assets industry would benefit from a standardized framework, reflecting a consensus of the industry.

The code for the CMTA's reference implementation for Ethereum is copyright (c) Capital Market and Technology Association, 2018-2024, and is released under Mozilla Public License 2.0.

This reference implementation is available as open-source code on GitHub. The code can be used in its original or modified form by anyone, without requiring permission from CMTA, being distributed under a permissive license.

CMTAT is blockchain agnostic, meaning that it is not tied to a particular blockchain: the CMTAT framework is a definition of a set of functionalities that a token can implement. Reference implementations currently exist for Ethereum and Tezos.

The CMTAT is blockchain agnostic and the CMTA welcomes the development of implementations on different blockchains, increasing the choice for companies looking to tokenize their securities. The CMTA is currently aware of the following implementations of the CMTAT:

Implementations developed by the CMTA:

Currently the CMTA GitHub account provides the CMTA’s reference implementation of CMTAT for Ethereum, as an ERC-20 compatible token:

• EVM: CMTAT(solidity): https://github.com/CMTA/CMTAT
• EVM: RuleEngine(solidity): https://github.com/CMTA/RuleEngine
• EVM: DvP (solidity): https://github.com/CMTA/DVP

Implementations developed by the Tezos Foundation

An implementation of CMTAT for Tezos in SmartPy (Python) is available. The code was developed by the Tezos Foundation. CMTA's Tech Committee reviewed the implementation for compliance with CMTA's standard only.

• Tezos: CMTAT-FA2 (SmartPy/Python): https://github.com/CMTA/CMTAT-Tezos-FA2

Other CMTAT implementations:

• A privacy-preserving implementation of CMTAT in Noir (Aztec network DSL) building on Aztec's technology, developed by Taurus: https://github.com/taurushq-io/private-CMTAT-aztec.
• An implementation of CMTAT for Tezos written in Ligo is available. CMTA has not been involved in this project: Tezos: CMTAT-Ligo (Ligo): https://github.com/ligolang/CMTAT-Ligo.

The CMTAT was originally designed for the tokenization of equity and debt securities, in particular shares of Swiss companies or bonds. The CMTAT is also suitable for tokenizing structured products (see the 2022 proof-of-concept organized by the CMTA).

CMTAT is suitable for the digitalization of various financial assets. Below is a selection of case studies:

Digitalization of equity securities: The CMTAT was initially designed for the digitalization of company shares. For SMEs, digitalization provides an opportunity to access new financing and investment models by selling digital shares through online exchanges (full list of benefits see our tokenization FAQ). Some companies that have digitalized shares using the CMTAT include:

• Magic Tomato SA an online grocery platform opened its governance and capital to its community, by issuing digital non-voting shares (bons de participation), allowing customers, suppliers and supporters to participate financially in the development of the company
• Qoqa Brew: The online retailer Qoqa opened the capital of its on-site brewery Q-Brew to its community by issuing digital non-voting shares
• Cité Gestion SA, a Swiss bank and wealth manager, issued digitalized shares in 2022, using the CMTAT. This case underlines the benefits of digital shares for private companies, whose shares are not offered to the public: companies have a real-time and accurate view of their shareholder base online, whilst their shareholders benefit from legal certainty for share transfers, thanks to the evidence of ownership provided by the digital ledger.
• daura uses the CMTAT to digitalize the shares of companies using its platform:

Digitalization of debt securities:

• UBS: CMTAT was used to issue a digital bond by UBS, as part of the first live repo transaction with a natively-issued digital bond on a public blockchain.
• SCCF: trade finance firm SCCF issued short term tokenized notes to refinance a loan to a commodity trading firm active in biofuels.

Digitalization of structured products:

• Credit Suisse, Pictet and Vontobel issued tokenized investment products that were traded on BX Swiss as part of a proof-of-concept leveraging the CMTAT.

Although initially designed for the Swiss legal framework, CMTAT has proven to be suitable for tokenization in other jurisdictions. The CMTAT's modular design means that the token code can be modified by adding, removing, or modifying features as required for compliance with other jurisdictions. Local legal representation should be consulted for questions on specific jurisdictions.

• The CMTAT supports the following core features:

• Basic mint, burn, and transfer operations
• Pause of the contract and freeze of specific accounts

The present implementation uses standard mechanisms in order to support:

• Upgradeability, via deployment of the token with a proxy
• "Gasless" transactions (so that fee payment can be transferred to another account than that of the transaction issuer).
• Conditional transfers, via a rule engine

The code of the CMTAT reference implementation for Ethereum contracts has been audited by ABDKConsulting, a globally recognized firm specialized in smart contracts security. Please refer to the CMTA GitHub repository for the latest audited version and the audit reports.

Each tokenization framework has unique properties, and different use cases call for different technology choices. Some of CMTAT's unique aspects include:

• CMTAT is not an "ERC" and is therefore not tied to Ethereum. It is suitable for multiple platforms, not only EVM platforms.
• CMTAT is more flexible than an ERC standard, as it is not bound to a technical specification, only to initial functional requirements. The functionalities can therefore be extended as required.
• The CMTAT is optimized for Swiss law following careful examination of the legal requirements and how they translate into technical requirements (but can be used in any jurisdiction if it complies with the jurisdiction's requirements.)
• The CMTAT is not managed by a single company, but a not-for-profit association counting multiple contributors. It is thus unlikely to be abandoned or tied to a private company's interest.

We have produced a detailed comparison of the CMTAT with other current tokenization standards, namely ERC-1400 and ERC-3643: https://cmta.ch/news-articles/a-comparison-of-different-security-token-standards

Will CMTAT evolve in the future?

CMTAT is under continuous development, with regular releases to include additional features, improvements in security and updates reflecting best practice and other industry standards.

CMTA’s members, from lawyers to blockchain engineers, are regularly working on new features, for example:

• Proposal to integrate ICMA's Bond Data Taxonomy fields to the CMTAT 

To be informed of updates to the CMTAT, “star” the project on GitHub and follow the next commits pushed to modify its code."