A strategic partnership between digital securities distribution platform Assetera and the Financial Conduct Authority-regulated digital securities exchange Archax is set to revolutionize access to tokenized real-world assets (RWAs) for investors in the United Kingdom, European Union, and the European Economic Area (EEA). This collaboration aims to tackle significant challenges faced by the tokenized RWA market, including regulatory uncertainty, limited liquidity, and technological complexities.
Addressing Challenges in the Tokenized RWA Market
The partnership between Archax and Assetera is specifically designed to overcome hurdles that have hindered the growth of the tokenized RWA sector. Key challenges include:
- Regulatory Uncertainty: Navigating the complex regulatory landscape can be daunting for firms looking to enter the tokenized asset market.
- Limited Liquidity: Without a sufficient number of participants actively engaging in buying and selling, markets can become illiquid.
- Technological Complexities: Implementing and maintaining technology that supports tokenized assets requires significant expertise and resources.
Initially, the Assetera platform will offer tokenized access to money-market funds managed by Abrdn, which oversees approximately £506 billion (about $662.4 billion) in assets. This initiative is just the beginning, as Assetera plans to introduce funds from additional asset managers in the near future.
In an interview with Cointelegraph, Thomas Labenbacher, CEO and founder of Assetera, emphasized the importance of the partnership. He noted Archax’s status as a UK-regulated digital asset exchange, along with Assetera’s compliance with European regulations such as the Markets in Financial Instruments Directive (MiFID II) 2014 and the Markets in Crypto-Assets Regulation. These regulatory frameworks are crucial for supporting regulated trading of RWAs.
The collaboration will facilitate access to various digital assets listed on Archax through the Assetera platform. This includes funds and structured products, enabling both primary sales and secondary market trading. Nick Donovan, Chief Revenue Officer at Archax, remarked, “This collaboration sets a new benchmark for digital asset distribution in the EU/EEA, integrating Archax’s regulated digital infrastructure with Assetera’s regulated decentralized finance market, further advancing the adoption of tokenized assets in Europe.”
Building Relationships and Expanding Offerings
Labenbacher further mentioned that Assetera and Archax plan to work closely together to forge relationships with fund companies. This collaboration will help onboard more tokenized funds onto the Assetera platform, expanding the options available to investors.
The opportunities for tokenizing assets are vast and include traditional financial markets, real estate, commodities, art, intellectual property, and cash and deposits. These diverse options not only appeal to a broad spectrum of investors but also help to enhance liquidity in the market.
As the demand for liquidity in Europe continues to rise, Assetera is focused on developing effective strategies to meet these needs. A spokesperson for Assetera emphasized the importance of prioritizing distribution in the early stages of the tokenized securities market to achieve long-term success.
Proper distribution involves hosting a sufficient number of active participants—buyers and sellers—who engage with the asset. Labenbacher noted, “Proper distribution ensures that the assets are accessible, compliant, and known to a large enough audience, setting the stage for a liquid market to emerge.”
Assetera currently lists a variety of tokenized financial instruments, including transferable securities, fund units, and derivatives, along with traditional RWAs such as real estate and art. This diverse offering positions Assetera as a key player in the tokenized asset market.
Technological Innovations with Polygon
On September 25, Assetera announced its plans to deploy in-house-developed smart contracts on the Polygon blockchain. This initiative represents a significant technological advancement for the platform, enabling it to execute trading activities directly on the Polygon network.
The use of stablecoins for purchases, clearing, and settlement through atomic swaps allows Assetera to enhance the efficiency and security of its trading processes. By leveraging the capabilities of the Polygon blockchain, Assetera aims to streamline operations and provide a more robust infrastructure for tokenized asset trading.
The partnership between Archax and Assetera marks a pivotal development in the tokenized RWA market, providing investors in the UK and Europe with increased access to a range of digital assets. By addressing regulatory challenges and focusing on liquidity, the collaboration aims to create a more efficient and compliant trading environment.
As the demand for tokenized assets continues to grow, this partnership will play a crucial role in shaping the future of digital securities in Europe. With ongoing innovations and a commitment to building relationships with fund managers, Archax and Assetera are poised to lead the charge in the evolving landscape of tokenized real-world assets.
