Switzerland Leads the Way in Classification of Digital Assets

The U.S. Securities and Exchange Commission (SEC) faces a significant challenge in dealing with crypto assets, an issue that Switzerland's Financial Market Supervisory Authority (FINMA) addressed nearly five years ago. Establishing a transparent framework for classifying digital tokens provides companies with the confidence necessary to conduct their operations and facilitates the widespread adoption of blockchain-based settlement systems.

Here are the three token definitions outlined by FINMA in 2018:

Payment tokens: These tokens are essentially cryptocurrencies without additional functions or connections to other development projects. In some cases, tokens may gradually gain the required functionality and eventually become accepted as a form of payment over time.

Utility tokens: Designed to provide digital access to applications or services.

Asset tokens: These tokens represent assets such as ownership in physical assets, companies, revenue streams, or the right to receive dividends or interest payments. In terms of their economic function, asset tokens are similar to equities, bonds, or derivatives.

According to these definitions, asset tokens are comparable to securities. If FINMA determines that a token is an asset token, the issuer is expected to comply with the same requirements as if it were a traditional certified security utilising any other settlement technology.

DGLD is widely recognized as a payment token that holds the same legal context as physical gold, whether it's in your possession or stored in an ecommerce bullion account. By holding DGLD, investors gain a direct ownership of a specific, allocated gold bar. The avoidance of pooling of assets gives investors greater security and accessiblity over their holdings. This accessibility makes DGLD a viable option for investors in Switzerland and throughout Europe, catering to a diverse range of individuals looking to capitalize on the benefits of gold ownership.

Gold Token SA takes great pride in being a Swiss company and operates as a Virtual Asset Service Provider (VASP) under the supervision of FINMA. Our gold-backed token, known as DGLD, has been adhering to FINMA's ICO guidance since 2019.