Welcome to the January edition of our monthly State of Tokenization, where we unravel the latest developments shaping the financial landscape. This month’s highlights include Nyala pioneering tokenized stocks in Germany, DigiFT’s strategic moves in the regulated RWA space, BIS’s ambitious CBDC and tokenization projects for 2024, and a deep dive into the tokenization debate at the World Economic Forum Davos 2024. Join us as we navigate the forefront of financial innovation and regulatory advancements in our dynamic January roundup.
Nyala Digital Asset AG has become the first company in Germany to issue tokenized shares to its shareholders. This marks a milestone for the application of blockchain technology. This development is the result of the recently passed Future Financing Act and will revolutionize securities trading.
Nyala uses its own licensed registrar, Smart Registry GmbH, to issue electronic registered shares based on a blockchain. This not only demonstrates the practical implementation of new legislations such as the eWpG (Act on the Introduction of Electronic Securities).
Looking to the future, Nyala is already working on a marketplace for trading these E-shares by 2025. 
DigiFT, a regulated exchange for on-chain real-world assets (RWA) licensed by the Monetary Authority of Singapore (MAS), has deepened its strategic partnership with HashKey Capital, an institutional asset manager investing exclusively in blockchain technology and digital assets.
This partnership aims to offer regulated treasury management and diversified investment services for HashKey Capital’s portfolio companies. DigiFT is addressing the scarcity of compliant and secure financial products in the market by offering a series of RWA investment offerings.
One of these offerings is the DigiFT U.S. Treasury Token (DUST), the first fully regulatory-compliant U.S. Treasury token issued on a public blockchain. Backed by a single U.S. Treasury note with a specific maturity date, DUST offers accredited and institutional investors an on-chain channel to invest in U.S. Treasuries. 
In 2024, the Bank for International Settlements (BIS) has planned several projects related to Central Bank Digital Currencies (CBDCs) and tokenization. The BIS Innovation Hub will move to the second phase of its CBDC privacy testing and initiate a blockchain-based tokenization project.
The program includes six new projects that will explore cybersecurity, combating financial crime, CBDCs, and green finance. One of these projects, named Project Promissa, is a collaboration between the BIS, the Swiss National Bank, and the World Bank. It aims to create a proof-of-concept platform for digital tokenized promissory notes.
The BIS also plans to continue its work on several other projects. These include Project Mandala, which aims to automate compliance procedures for cross-border payments; Project Pyxtrail, which monitors the balance sheets of asset-backed stablecoins; and Project Cambridge, which experiments with a multi-CBDC platform for cross-border payments. 
The session was a significant part of the WEF Davos 2024, where a panel of experts discussed the future of digital assets and the role of tokenization. The panel included Lieve Mostrey, the CEO of Euroclear, Jeremy Allaire, the CEO of Circle, Denelle Dixon, the CEO and executive director of the Stellar Development Foundation, and Anthony Scaramucci, the founder of SkyBridge Capital.
The panelists discussed the transformative potential of tokenization, which involves representing real-world assets as digital tokens on a blockchain. Jeremy Allaire, the CEO of Circle, made a notable argument during the discussion. He suggested that tokenization should not be regulated by the U.S. Securities and Exchange Commission (SEC). According to Allaire, tokenization is similar to data, with tokens used to represent and prove things of value. The challenge, he pointed out, lies in defining where tokenization fits within the finance sector.