Tokenization of real world assets is seen as one of the most promising and innovative applications using blockchain technology. In our tokenized securities with payments through stablecoins use case, we aim to legally explore the innovative use case of a tokenized financial security and a stablecoin integration. With our cooperation (2Tokens, Assetblocks, ABN AMRO and Rabobank), we want to bridge the gap between the physical world and the digital economy by tokenizing real assets and the euro's used for the payments.
The use case provides the possibility for both professional as well as non-professional investors to invest in the tracking stock of SPVs that represent renewable energy sources like wind, solar and battery parks. The proof of ownership is tokenized and represented by a Non-Fungible Token (NFT) where the smart contract on the blockchain is the true primairy register. The issuance is a security under MiFIDII. Owners of the tracking stock, based on their (number of) NFT(s) are potentially entitled to pro rata dividend payments.
Owners of the tokenized securities are not necessarily in the country of origin of the issuer of tracking stock. Payments can thus be cross-border, but within the EU/SEPA region. Up until recently, payments were only made using fiat currency, but going forward, payments, both for purchase/sale of the tokenized securities and distribution of dividends, should be performed using a stablecoin.
Our use case aims to explore the use of Euro or bank deposit stablecoins as well as tokenized assets. Both non-hosted wallet held by the owners as well as hosted wallets provided by banks will support these stablecoin transactions, ensuring new ways of accessibility and convenience for investors. Although on first hand this might look straight forward, implicitly this can raise interesting questions on the background, e.g. as for any transaction of stablecoins or tokens on a public permissionless network, local cryptocurrencies are needed. To gradually built up our use case we divided it into various scenarios we will explore:
Payment scenario one will focus on buying, selling and buy-back of the tokenized securities using a stablecoin. The token owners will use accounts and hosted wallets at banks to hold their tokens as well as stablecoins for buying, selling an receiving dividend pay-out, with the possibility to on- and of ramp EUR stablecoins via the bank. The type of stablecoin will be existing regulated stablecoins, EUROC (Circle) and/or EURe (Monerium) and/or Euro stablecoin issued by Rabobank and ABN AMRO (deposit backed token). Any transaction of these types of stablecoins or tokens will require the local blockchain network cryptocurrency as well, implicating that, in case of hosted wallets, these cryptocurrencies, besides the tokens and stablecoins, will need to be on the books of the wallet hosting parties as well.
The second scenario build on the first one but will be extended with various elements. For all actions described in the first scenario (buy, sell, dividend payment, on- and of ramping), the possibility to do so in cryptocurrency instead of stablecoin is added as well.
Furthermore, besides using hosted wallets at the banks, the usage of unhosted wallets is in place as well. In this scenario, there are a few more elements enclosed.
Furthermore, in the second scenario, the possibility to set up peer-to-peer escrow smart contracts for real time settlement of payment through stablecoins in the transfer of ownership of the tokenized security without the use of a third party is explored. Also owners of the tokens, besides having economic rights, will be able to be part of the governance (voting rights) in the SPV. The type of stablecoins for this scenario is all types. Including dollar versions like USDT/USDC and non-fiat related stablecoins.
We are also interested to explore other options to tokenize assets as a security token, such as bonds or equity. This presents a third scenario for us, to explore if the answers to the questions asked in the first two scenarios are still valid.