The Union Bank of Lichenstein is set to become the first bank to issue its own security token. Union Bank AG is a fully licensed and regulated bank in Lichtenstein, providing a variety of services in Germany, Switzerland, Austria, and the Middle East. It currently facilitates fiat to crypto conversions as well as supporting ICOs. It is partnered with a number of crypto-brokers.
The Union Bank AG security token
As per the announcement by the Lichtenstein bank, it will be the worlds first regulated and licensed bank to issue a security token. Union Bank AG will be collaborating with Verum Capital AG in order to bring the project to fruition, a blockchain company located in Switzerland, an area known for blockchain innovation. The security token is to be launched under the guidelines of the Financial Market Authority (FMA).
Union Bank is aiming to become a ‘one-stop blockchain and crypto provider’ for all cryptocurrency trading activities. Aside from the security token, they have further plans to build a stablecoin that will be fully backed by a fiat currency, most likely the Swiss Franc, which is often viewed as a safe haven. According to the chairman of the board of directors, MH Dastmaltchi –
“As a fully licensed and regulated bank we are in a privileged position to combine all the advantages of traditional banking with the possibilities inherent in the blockchain technology. As such, our fiat-backed Union Bank Payment Coin has the potential to disrupt the approach to international trade and international cross-border transactions. With our initiative we are investing in the future and becoming the world’s preeminent blockchain investment bank”
The case for a bank-issued security token
The cryptocurrency community is in many ways divided on the significance of regulatory approval and security tokens issued by centralized authorities. This is because it is often held to violate the tenet of decentralization. Cryptocurrencies are proliferating, and if every large company, bank, and country issue their own, in tandem with existing currencies, it could further muddy the waters in an effort to find true value in a sea of available tokens.
On the other hand, a bridge is necessary between the existing fiat infrastructure and the new era of decentralized cryptocurrencies.
Lichtenstein is known as a blockchain hub much like Switzerland, and there is much innovation taking place in this region. Most banks are now taking an active interest in all aspects of DLT, even central banks who have historically been very hostile towards the transformative technology.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.