Digitisation of art
Successful tokenisation of a work of art – a first step towards the future of finance as a pioneer in the field of digital assets.
In line with Strategy 2026 – Seize opportunities, one of VP Bank’s goals is to take advantage of new business opportunities and develop innovative, professional solutions for its clients. To achieve this goal, the potential areas of application of blockchain technology and, in particular, tokenisation are especially important. A survey of Liechtenstein intermediaries confirmed client demand in this area, and an overwhelming interest in the tokenisation of art in particular.
The global art market is currently valued at around USD 1.7 trillion; USD 50 billion in transactions took place last year alone. While many market participants appreciate art for aesthetic reasons, financial considerations are also a key aspect of acquisition. Wealthy individuals own art not only for emotional reasons, but also, often, for the purposes of asset diversification. Consequently, wealth managers and trustees are increasingly looking to assets that, like works of art, do not fall into traditional, bankable asset categories. This comes with challenges such as a lack of posting in the client’s deposit account, or, in the case of a transaction, the necessary involvement of additional intermediaries. Furthermore, in the case of inheritance, these assets often make equal distribution difficult.
All these issues can be resolved by means of tokenisation. The legal framework in Liechtenstein allows ownership claims to art objects to be represented digitally in the form of tokens. On the basis of an innovative IT solution that was created together with reliable partners, VP Bank is now able to not only create tokens, but also directly post them to client portfolios. This makes it possible to establish a holistic overview of assets without requiring costly traditional structures. The fractionability of the tokens means that shared ownership can also be mapped transparently, allowing for a fair division of property in the case of inheritance or joint acquisitions. Furthermore, the work of art is included in various statements and in e-banking, which helps to simplify processes such as taxation or performance calculations.
VP Bank has been registered with the Liechtenstein Financial Market Authority (FMA) as a token creator and token depository since 29 November 2021. Following its inclusion in the TTTA Register, VP Bank successfully tokenised the first physical work of art, thus creating a digital ownership claim on the blockchain over a physical work of art for the first time in Liechtenstein. This means VP Bank is able to tap into art as a new asset class, while at the same time participating in the rapid digitisation of the market at an early stage. Through tokenisation and the associated processes involved in verifying artworks, the Bank has created a foundation for offering further services in this area in the coming year, as well as to establish a corresponding network with qualified partners. With this milestone, VP Bank has taken a pioneering role and tapped into an important niche.