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The Warsaw Stock Exchange wants to tokenize physical art

by EasyDailyCrypto News
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The Warsaw Stock Exchange (WSE), the largest financial institution of its kind in Central and Eastern Europe, will issue fungible tokens representing ownership of physical artworks. The initiative was launched in partnership with artinfo.pl, a Polish art market platform.

A Warsaw Stock Exchange representative declined to disclose the blockchain the project would live on. The initial batch of artworks to be tokenized or a launch date are also kept secret. At the same time, the WSE claimed they have already worked out the legal side of things and began work on the technology.

Entering the art market for a NYC lunch price

The WSE hopes to encourage retail investors to enter the art market as they intend to make high-value artworks more accessible. The minimum value for pieces participating in the program is said to be 1 million PLN, or $215,000, but the average is expected to be even higher. Investors will be able to acquire tokens for as little as 100 PLN, or $21.

Purchasing the full token supply, effectively taking the artwork off the market, is not out of the question, either, but keeping the artwork on the WSE’s platform will improve its liquidity and exposure.

To participate, investors will need to complete KYC checks and abide by standard TradFi regulations, including EU anti-money laundering laws.

Smells like DAO

Tokens will be available for purchase at launch as well as on the secondary market. Apart from ownership, they will grant holders voting rights in the decision making process concerning the fate of the artwork. As such, each token will carry governance utility in a sort of centralized DAO, however odd that sounds.

The community could, for instance, decide to exhibit the piece at a museum or gallery for a wider audience to enjoy. But by default, the Warsaw Stock Exchange will provide museum-standard facilities for storage purposes.

A first for a stock exchange, but not for crypto

No such experiment has ever been attempted by a traditional stock exchange before, but the idea itself is not new. Sygnum, a Zurich-based crypto bank, has already fractionalized the ownership of Pablo Picasso’s Fillette au béret, and even an NFT, CryptoPunk #6808.

Sygnum calls the “shares” in those artworks, which are recognised under the Swiss law, Art Security Tokens (ASTs). With the Picasso, token sales were settled in Sygnum’s digital CHF stablecoin (DCHF).

The Warsaw Stock Exchange’s project will most likely only accept the Polish zloty, excluding any digital assets. For now, it appears to be quite far from launching. If it does succeed, it could set a new standard for TradFi’s affairs with crypto and increase traditional investors’ awareness of just what a blockchain can do.

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