At Token City, we are celebrating once again— this time after receiving a favorable assessment from the Spanish Securities Market Commission (CNMV), regarding the technical tests of our Exchange for tokenized assets within the framework of the Pilot Regime.
The CNMV’s report is part of our participation in the Spanish regulatory sandbox, which serves as a pathway to the final evaluation that will be carried out by the European Securities and Markets Authority (ESMA). The opinion issued by the CNMV reaffirms the potential of our blockchain-based market infrastructure and highlights the constructive spirit that has defined our relationship with the Spanish regulatory authority.
Token City and the CNMV Sandbox
A regulatory sandbox is an environment controlled by the competent authority to test financial technologies before their real application in the markets. Our objective in taking part is to test and validate our platform, which combines registration, issuance, trading, and settlement of securities using blockchain technology.
The technical tests focused on key aspects such as the onboarding of issuers and investors, the listing and trading of simulated financial instruments (shares), atomic settlement, dividend payments, and registration and control functions through smart contracts. Ten real investors participated in a "non-custodial" environment, ensuring fund segregation and transaction integrity.
As noted by the CNMV, the model proposed by Token City incorporates payments through a Euro-referenced stablecoin (E-money token issued by an Electronic Money Institution). This feature prompted extensive discussions within ESMA working groups and at the European Commission, allowing for thorough validation of our approach and compliance with the demanding regulatory standards of the European Union.
A Collaborative and Fruitful Relationship
Meeting the technical, administrative, regulatory, and financial requirements imposed by the launch of a tokenized assets Exchange in the EU is a major challenge, but so is being a pioneer in such a nascent industry with such high potential impact.
Throughout this journey, the "space for collaboration and mutual learning" mentioned by the CNMV has been maintained in relation to the progress of the technical tests of Token City’s Exchange. In 2023, Token City signed the Sandbox Testing Protocol, and shortly afterward the new Securities Markets and Investment Services Act (LMVSI) entered into force.
Since then, in parallel with the CNMV’s support to meet the requirements of our sandbox project, the frequency of our interactions with the national supervisor has increased given our work as a regulated tokenization services provider.
Facilitating the first E.R.I.R, the first 100% native on-chain bond issuance, and also the first 100% native on-chain share has led us to interact with the CNMV on numerous occasions. Thanks to professionalism and mutual understanding, Token City is opening the tokenized financial assets market with full legal validity in Spain.
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Enter the new tokenized economy
Token City is the ultimate bridge to the tokenized economy (tEconomy), in which tokenized companies (tEnterprises) create their cryptoasset markets (tMarkets), open to global investors (tCitizens).
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