DIGITAL SECURITIES IN PRACTICE

What Digital Securities Are and Where Tokens Fit In

What Digital Securities Are and Where Tokens Fit In

What Digital Securities Are and Where Tokens Fit In

A digital security is a security that exists only as an electronic record, with no paper certificate behind it. A security token is one type of digital security, where that record sits on a blockchain. Both give your investors exactly the same rights as the conventional instrument. The difference is where the record lives and what you can do with it.

What makes a security digital

A digital security is a bond, fund unit or share that exists only as an entry in an electronic register. A growing number of EU countries now allow this, so there is no paper certificate sitting in a vault anymore. Your investors’ rights don’t change. Only the way they are recorded does.

When a digital security becomes a token

A security token is a digital security recorded on a blockchain instead of a central register. The register can be maintained by a licensed registrar, or just in the smart contract itself.. So every security token is a digital security, but not every digital security is a token.

What a token adds in practice

Because the token lives on the blockchain register itself, rules can be built straight into it. Only verified investors can hold it, interest or dividends pay out automatically, and transfers follow set restrictions. That makes smaller tickets and faster settlement much easier to offer, while the security underneath stays exactly the same.

Which rules apply to digital securities

A digital security is still a security, whether it sits in a central register or on a blockchain. The same EU rules apply either way: MiFID II, the Prospectus Regulation, and KYC/AML checks on every investor. MiCAR, the EU’s rulebook for crypto-assets, does not cover security tokens. A token changes how your security is recorded, not which rules you follow.

DIGITAL SECURITIES MARKET

The numbers behind digital securities

The numbers behind digital securities

Digital securities have moved from pilot projects to real issuance. Banks, asset managers and companies now issue bonds and fund units on digital registers, and the volume grows every year.

$38.9 billion

Assets on digital registers today

$5.4 billion

Digital bonds issued in 2025

$9 billion

Digital government bonds

$2 trillion

Expected by 2030

THE TRUTH ABOUT DIGITAL SECURITIES

What digital securities do, and what they don’t

What digital securities do, and what they don’t

What digital securities do, and what they don’t

Most explainers only show the left column. The right one is why issuers can trust the left.

Most explainers only show the left column. The right one is why issuers can trust the left.

What digital securities are and do

A security, recorded electronically, so investors hold exactly the same rights as with a paper certificate.

Smaller minimum tickets, as each investor can be administered digitally at a low cost per unit.

Faster settlement, as fewer intermediaries sit between issuer and investor.

One shared record, as ownership and transfers are kept in a single electronic register.

Built-in compliance, as rules like “verified investors only” and transfer restrictions can be enforced in the record itself.

Automated payouts, as interest and dividends can be calculated and paid without manual work.

Fully digital distribution, as subscription, onboarding and payments can run online from start to finish.

What digital securities don’t change

Not a crypto-asset. Digital securities fall under securities rules inside MiFID II, not MiCAR.

No lighter rules. Prospectus requirements, investor checks and disclosure duties stay the same as for paper securities.

No guaranteed liquidity. A digital format makes resale easier to organise, but it cannot create buyers.

No built-in demand. Investors come from your network and the quality of the offer, not from the format.

No change in value. The asset, the issuer and the risk stay the same. Only the way it is recorded changes.

Not always cheaper. Costs fall when fewer intermediaries are involved, but setup and partner fees depend on the offering.

What digital securities are and do

A security, recorded electronically, so investors hold exactly the same rights as with a paper certificate.

Smaller minimum tickets, as each investor can be administered digitally at a low cost per unit.

Faster settlement, as fewer intermediaries sit between issuer and investor.

One shared record, as ownership and transfers are kept in a single electronic register.

Built-in compliance, as rules like “verified investors only” and transfer restrictions can be enforced in the record itself.

Automated payouts, as interest and dividends can be calculated and paid without manual work.

Fully digital distribution, as subscription, onboarding and payments can run online from start to finish.

What digital securities don’t change

Not a crypto-asset. Digital securities fall under securities rules inside MiFID II, not MiCAR.

No lighter rules. Prospectus requirements, investor checks and disclosure duties stay the same as for paper securities.

No guaranteed liquidity. A digital format makes resale easier to organise, but it cannot create buyers.

No built-in demand. Investors come from your network and the quality of the offer, not from the format.

No change in value. The asset, the issuer and the risk stay the same. Only the way it is recorded changes.

Not always cheaper. Costs fall when fewer intermediaries are involved, but setup and partner fees depend on the offering.

DIGITAL SECURITIES IN PRACTICE

Three examples of Digital Securities at work

Three examples of Digital Securities at work

Three examples of Digital Securities at work

The three examples below are illustrative, but each one reflects a common setup. Every issuer raises money with a digital security and relies on a different strength of the format.

A solar developer opens its bond to smaller investors

A mid-sized solar developer needs €5M for three new solar parks and issues a 5-year digital bond paying 6% a year. Because every investor is administered digitally, the minimum ticket drops from €100,000 to €500, and 1,240 local investors subscribe online. Interest is calculated and paid out automatically each year, with no manual payout runs.

A solar developer opens its bond to smaller investors

A mid-sized solar developer needs €5M for three new solar parks and issues a 5-year digital bond paying 6% a year. Because every investor is administered digitally, the minimum ticket drops from €100,000 to €500, and 1,240 local investors subscribe online. Interest is calculated and paid out automatically each year, with no manual payout runs.

A real estate fund lets investors exit early

A residential real estate fund raises €12M for a housing project through digital fund units, with a minimum investment of €1,000. When an investor needs their money back before the fund ends, they can offer their units to other verified investors. Once a match is found, the transfer is recorded on the register the same day instead of waiting on paperwork.

A family business shares its success with its employees

A 300-person family-owned manufacturer issues digital shares to its own staff. Transfer restrictions are built into the record, so the shares can only move between employees. Dividends reach all 300 accounts automatically each spring, and HR no longer keeps a spreadsheet of who owns what.

A family business shares its success with its employees

A 300-person family-owned manufacturer issues digital shares to its own staff. Transfer restrictions are built into the record, so the shares can only move between employees. Dividends reach all 300 accounts automatically each spring, and HR no longer keeps a spreadsheet of who owns what.

DIGITAL SECURITIES USE CASES

Further reading on digital securities use cases

Further reading on digital securities use cases

Further reading on digital securities use cases

Bonds, fund units, shares and notes can all be issued as digital securities. Pick your use case to see how it’s structured.

Bonds, fund units, shares and notes can all be issued as digital securities. Pick your use case to see how it’s structured.

PROPERTY

Real Estate

Finance new projects, refinance existing ones or open property income to more investors

DEBT

Corporate bonds

The most common way companies raise money with digital securities.

FUNDS

Investment funds

Digital fund units, online subscriptions and an investor register that keeps itself up to date.

RECEIVABLES

Invoices and receivables

Turn outstanding invoices into investable assets and free up working capital.

EQUITY

Company shares

Offer shares directly to a wider group of investors without going public.

STARTUPS

Startup rounds

Raise a round from many investors while keeping the cap table clean.

CREDIT

Private credit

Lend directly to companies and manage repayments and investors in one place.

ENERGY

Project financing

Fund solar, wind and other infrastructure projects with investor capital.

AFTER THE ISSUANCE

The real work starts after the raise

The real work starts after the raise

The real work starts after the raise

A bond or fund unit runs for years after the last investor subscribes. Interest has to be paid, investors change addresses or sell their units, and every change has to be recorded correctly. With paper or spreadsheet-based registers, this admin grows with every investor you add.

With a digital security, the register itself does much of this work. Payouts are calculated and sent automatically, transfers between verified investors are recorded the same day, and you can see at any time who holds what. Resale works best as a bulletin board, where investors post offers and find each other. Running an active exchange with order matching is a licensed activity, so most issuers keep it simple.

A bond or fund unit runs for years after the last investor subscribes. Interest has to be paid, investors change addresses or sell their units, and every change has to be recorded correctly. With paper or spreadsheet-based registers, this admin grows with every investor you add.

With a digital security, the register itself does much of this work. Payouts are calculated and sent automatically, transfers between verified investors are recorded the same day, and you can see at any time who holds what. Resale works best as a bulletin board, where investors post offers and find each other. Running an active exchange with order matching is a licensed activity, so most issuers keep it simple.

Investor management card showing total investors and weekly growth on the ONINO platform

FAQ

Questions issuers ask

If your question is not here, the deeper guides linked above go further.

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