Taurus and Teylor Team to Tokenize Loans to German Small Businesses

Swiss crypto custody firm Taurus has launched a partnership with lending platform Teylor.

The partnership, as reported Thursday (Dec. 14) by Coindesk, allows Teylor’s credit portfolio tokens to be admitted for secondary market trading on the Taurus TDX market.

Taurus Co-founder Lamine Brahimi told the news outlet that the tokenization process involves a Luxembourg-based investment vehicle and adheres to both Swiss and European regulations.

Brahmini added that the tokenized debt product for Germany’s small and mid-sized business market is due to receive a “landmark” investment in the coming weeks.

“TDX market is Taurus’ other business besides custody, and we have done 20-plus transactions,” Brahimi said. “These include tokenized equity, debt, structural products and art. In terms of notional value, it’s over $1 billion so far.”

Teylor offers loans between $109,000 and $1.6 million to Germany’s “Mittelstand” sector — businesses with fewer than 500 employees and turnover of under 50 million euros — and offered just under $25 million in loans last month, CEO Patrick Stäuble told Coindesk.

“We give loans to businesses that make usually between five and 50 million revenues, that are kind of maybe a little bit too big for a bank branch, and a little bit too small for a corporate finance department,” Stäuble said.

“The loans we are going to tokenize will be for fantastic German businesses, everything from industrials, chemicals and precision machinery to import/export.”

The Coindesk report notes that tokenization of traditional finance has taken off around the world, making it unsurprising that a pro-crypto country like Switzerland is giving a variety of asset classes an “institutional-grade blockchain treatment.”

Tokenization involves converting traditional financial assets into unique digital tokens, allowing for quicker and more efficient transactions.

Switzerland’s central bank has been at the forefront of tokenization efforts, PYMNTS wrote last month, as that bank teamed with the International Monetary Fund (IMF), the World Bank and the Bank for International Settlements (BIS) to explore the concept of tokenization.

That project is designed to leverage tokenization technology to streamline financial processes and improve global economic development, with a focus on simplifying paper-based processes involved in supporting the world’s poorer regions.

The BIS, central banks and traditional financial institutions are also working on ways of creating and using tokenized bank deposits, PYMNTS reported in October.

For example, the BIS is working with central banks to launch Project Mandala, which “seeks to ease the policy and regulatory compliance burden by automating compliance procedures” and would do so for both tokenized deposits and central bank digital currencies (CBDCs).