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Since the Electronic Securities Act entered into force on  10 June 2021, bearer bonds can now be issued as crypto securities. This process requires registration in a crypto securities register, managed by an authorised registrar. To meet this need, financial technology company Chartered Investment established e-Sec GmbH as a subsidiary, launching operations in December 2021 with an initial provisional licence. ”Securing full BaFin licence for crypto securities registry management is another key milestone toward the widespread adoption of this innovative technology”, says e-Sec General Manager Markus Fehn.

The rise of crypto securities

Crypto securities are the fully digital evolution of traditional financial instruments such as bonds and fund shares. This transformation paves the way for significant improvements in securities processing and efficiency. The market is expanding rapidly – the volume of crypto securities increased twenty-fold in the second half of 2024 alone. “While we welcome this development, the adoption of crypto securities is still in its infancy. Seamless integration with the existing financial ecosystem is essential for their widespread acceptance”, says Markus Fehn.

As a pioneer in crypto securities, Chartered Investment has played a key role in shaping this space. In 2018, the company supported the world’s first issuance of a certificate on the blockchain. By December 2021, it facilitated the launch of the ZSquare Venture Opportunity Crypto Security, marking the first issuance of a crypto security under the strict regulatory framework of the Electronic Securities Act. “With the deregulation of the US crypto market and the legally secure European framework provided by regulations such as MiCA, we now see immense growth opportunities ahead”, Fehn adds.

e-Sec enhances Chartered Investment’s service portfolio

As a crypto securities registrar, e-Sec expands Chartered Investment’s suite of financial products and digital assets, reinforcing its position as a leading independent platform for innovative investment solutions. By integrating registry management, Chartered Investment offers issuers a seamless, end-to-end process – from conception and issuance to the management of their digital securities. This streamlined approach enhances efficiency and accessibility for both issuers and investors. Investors benefit from simplified access to cutting-edge financial products while enjoying greater transparency and security. Through direct blockchain integration, they gain access to an optimised trading and custody structure, which reduces transaction costs and ensures real-time availability of their securities.