SWEDEN Law and Practice Contributed by: Niclas Rockborn, Rikard Sundstedt and Robin Entenza, Gernandt & Danielsson
risks associated with the referenced assets, as well as the liquidity risks arising from token holder redemption rights. Any invested portion of the reserve may only be placed in highly liquid financial instruments with minimal market, credit and concentration risk. MiCA adopts a categorical ban on yield-bearing stablecoins. Issuers of asset-referenced tokens or e-money tokens may not grant interest or any other benefit related to the length of time during which a holder holds such tokens. 6.2.4 Special Considerations Significant asset-referenced tokens and e-money tokens are subject to enhanced regulatory oversight under MiCA. The EBA designates these tokens as sig- nificant based on specific criteria, such as the number of holders, market impact as well as the transaction volume. Issuers of significant tokens are also subject to direct supervision by the EBA. Issuers of significant tokens must comply with stricter obligations, including adopting sound risk manage- ment policies, implementing liquidity management policies, ensuring diverse custody options, and con- ducting regular stress testing. These stricter obliga- tions include a requirement that at least 60% of fiat funds corresponding to issued tokens be held as deposits with credit institutions. 7. Tokenisation and Real-World Assets 7.1 Treatment Tokenisation involves expressing ownership rights and other rights attached to an asset as programma- ble code, a so-called smart contract, on a distributed ledger or blockchain. One method of tokenisation involves tokens being issued directly on the blockchain, and having all
records related to tokens and their issuance, redemp- tion, disposal and transfer be recorded solely on the blockchain. Another method is a digital twin model, where tokens do not alone represent the legal exist- ence of the right, and are instead a digital proof of ownership in addition to the underlying original mani- festation of ownership (eg, in a traditional register). As Sweden has not enacted any specific legislation governing tokenisation, the general rule is that tokeni- sation may give assets a new technical form but typi- cally not change the characteristics of the underlying assets. For example, tokenised bank deposits are legally and economically identical to money in bank accounts, and therefore represent a claim on the bank. For some types of assets, this means that tokenisa- tion has limited use. For example, for property that is subject to specific legislation requiring ownership transfers to be manifested in particular manners (eg, for sale of real property where there is a written form requirement), a digital transfer of a tokenised reflec- tion of the property will not actually transfer title to the underlying asset. However, for other types of assets, the absence of express recognition or accommodating legislation is less of a practical hindrance, and for those cases tokenisation can have real benefits. One example is tokenised fund units, which can enable faster and more efficient subscription and redemption process- es, open up for fractional ownership, and provide near real-time transparency through tamper-proof trace- able transactions and portfolio transparency on the blockchain. Due to the stagnation in Sweden’s legislative adjust- ments to the DLT Regulation, and the absence of fol- low-up on the legislative proposal published in 2023, it is uncertain what lies ahead for tokenisation in the Swedish market.
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