The first Picasso painting that was tokenized by a regulated bank has found a new owner, resulting in a profit of approximately 20%. Over 60 token holders participated in this community investment organized by Artemundi and Sygnum Bank.
The tokenization project was initiated in 2021, marking the first time that ownership rights to artworks were transferred from a regulated bank to a public blockchain. The painting "Fillette au béret" (Picasso, 1964) was tokenized into Art Security Tokens (ASTs), which aimed to provide investors with easier access to the digital market and lower entry barriers into the art market. The decision to sell was made by the token holders through a majority vote, and the proceeds from the sale were distributed to the wallets of the token holders using smart contract technology.
A Picasso painting tradable as a token
Tokenization facilitates easier access to the art market by simplifying the ownership and trading of artworks for investors. Essentially, it involves converting ownership rights to a physical artwork into a digital token on the blockchain. This process allows for fractional ownership, where multiple investors can own shares of an artwork. As a result, more people have the opportunity to invest in high-value artworks that would traditionally be inaccessible.
The case of Picasso's "Fillette au béret" serves as an illustrative example of how tokenization can democratize art investments. By converting the painting into Art Security Tokens (ASTs), multiple investors were able to purchase and trade fractions of the artwork starting from CHF 1,000 per token. This approach facilitated the secure and efficient buying and selling of the artwork. A painting worth 4 million was made accessible to smaller investors as well. The press release did not disclose the identity of the new owner of the Picasso painting.
"After many years managing investment fund structures, this tokenisation experience revealed that art trade fundamentals remain relevant. By ensuring quality, provenance, conditions and pricing, the fractional ownership of artworks via a blockchain perfects the direct ownership without costly intermediaries" - Javier Lumbreras, CEO Artemundi
