How Does the Legal Concept of Ownership Transfer Apply to a Tokenized Asset?
The legal transfer of ownership for a tokenized asset depends on the jurisdiction and the asset type. For regulated assets (security tokens), the transfer of the token on the blockchain must be legally recognized as the transfer of the underlying asset's title.
This requires legal frameworks to acknowledge the token's private key control as proof of ownership. For some jurisdictions, this is achieved through legal 'wrappers' or specific regulatory sandboxes.
Glossar
Ownership Transfer
Mechanism ⎊ Ownership Transfer of a derivative contract occurs through the execution of a trade on an exchange or peer-to-peer, which results in an update to the ledger reflecting the new holder of the contractual right or obligation.
Transfer of Ownership
Title ⎊ The Transfer of Ownership in digital assets represents the definitive change in legal and cryptographic title from one entity to another, typically recorded on the base layer.
Tokenized Asset
Concept ⎊ A Tokenized Asset is a digital representation of ownership or a fractional claim on an underlying asset, which can be tangible, such as real estate or gold, or intangible, like intellectual property or company equity, recorded on a blockchain.