Backed Finance AG, a client of Walkers, has formed a tokenisation platform involving a Jersey issuer of virtual tokens. Jersey was selected as their chosen jurisdiction for its growing reputation as a fintech centre, its tax neutrality, its nexus to EU countries and the UK, and the quality of traditional local service providers (such as banks, administrators) to support their business. The tokens are ‘securities’ and structured products issued on the blockchain, which are backed 1:1 by a prescribed underlying real-world asset, such as a Google share. The token holders have no economic or voting rights in the underlying asset, and no claim on the issuer’s assets (other than to the collateral relating to their token).
The value of an investor’s token tracks the performance of the underlying asset relating to that token. Tokens can only be issued to investors who have complied with Jersey’s AML regime and who have expressly acknowledged prescribed investment warnings. Once issued, tokens are registered and transferred via the blockchain, and can be redeemed with the issuer after satisfying AML requirements. Cavendish provide corporate services to the Jersey issuer.
Download our report to read more case studies: The Evolution of Virtual Assets and Jersey’s Growing Role
