Spyros-Nikitas Tsamichas at EFSYN – Blockchain as a LegalTech Tool

In an era where societal and environmental challenges demand radical changes, blockchain and legal technologies (LegalTech) are emerging as critical factors for resilient and sustainable development. The tokenization of Real World Assets (RWAs) is heralded as the next major revolution in global markets. Built upon the immutable and decentralized nature of blockchain, it paves new avenues for data transparency and automation.

Digital Token

This global shift, exemplified by companies like Walmart and FedEx, prompts us to consider how Greece can adopt and leverage the power of these technologies. Specifically, tokenization is the process of converting a real-world asset or sensitive data into a digital “token.” This token can then be used in place of the original asset, for instance, in a transaction, without revealing the underlying information. It’s a secure way to manage value or data in a digital environment, based on blockchain technology – a type of digital “ledger” for transactions that is transparent and immutable. All entries are interconnected across all nodes and cannot be altered without the network’s consensus, making it extremely reliable for financial, legal, and administrative applications.

As Larry Fink, CEO of BlackRock, declared that “tokenization will be the next generation of markets,” major financial institutions, such as JPMorgan, have already invested in this trend, indicating the potential for a reshaping of the financial landscape.

The significance of RWAs lies in their ability to democratize investment opportunities, enabling individuals to participate in sustainable markets that were previously inaccessible. For example, traditional legal contracts can be transformed into smart contracts on the blockchain, automating processes and ensuring compliance. A tokenized real estate or private vehicle transaction, for instance, could automatically execute payments and transfer ownership once predefined conditions are met, reducing the need for intermediaries and simplifying the transaction process. This automation not only enhances efficiency but also minimizes the potential for disputes, as the terms of the agreement are coded into the blockchain from the outset.

Similarly, the financial sector is observing a shift towards digital bonds via blockchain, minimizing costs, accelerating trading processes, and facilitating investor access to capital markets. UBS, having already issued tokenized bonds, demonstrates how by reducing the friction associated with traditional bond issuance, tokenization can enhance transparency and attract a wider range of investors.

In logistics and supply chain management, tokenization can improve asset traceability, ensuring integrity and origin. Companies like Coca-Cola already use blockchain to track their supply chains, improving efficiency and reducing waste. Businesses can now monitor the movement of goods in real-time, ensuring that products are transported ethically and sustainably. This level of transparency not only boosts consumer trust but also encourages companies to adopt greener practices.

Regulatory Framework

The regulatory landscape surrounding tokenization is evolving, particularly within the European Union, which has established a framework supporting these innovations. The MiCA (Markets in Crypto Assets Regulation) for cryptocurrencies and the EU DLT Pilot Regime (Distributed Ledger Technology) for the digital infrastructure of tokenized securities are examples of how the EU is fostering an environment conducive to the adoption of innovative practices. Similarly, Greece has taken small steps towards adopting these technologies through Law 4961/2022. However, it needs to go further to leverage the potential of this emerging ecosystem, through the establishment of regulatory sandboxes – controlled testing environments that will promote the experimental testing of tokenization products – and to encourage collaboration between startups and established entities.

In an effort to harness the disruptive technological spirit of the era, Energon Green Solutions and Xenios Blockchain Group are significantly dedicated to research and development of green innovative technologies, focusing on promoting holistic sustainability. The collaboration aims for the optimized use of data and processes, ensuring that the sustainable outcome aligns with the highest industry standards.

The technology, being scalable and adaptable, is capable of processing and supporting several thousands of data points and transactions per second, ensuring the reliability required for critical financial and legal procedural functions.

Authors: SPYROS-NIKITAS TSAMICHAS, Lawyer and Co-founder of Energon Green Solutions TASOS OUREILIDIS, CEO, Xenios Blockchain Group