Choosing where to issue a security token is not just a technical decision, but a strategic one. The jurisdiction determines the legal certainty of the security, access to the European market, the cost of structuring the issuance and the maturity of the provider ecosystem. Four European hubs stand out in securities tokenisation: Spain, Luxembourg, Switzerland and Liechtenstein. Each offers a different framework, and the right choice depends on the issuer's profile and which investors it wants to reach.
The underlying difference is that Spain and Luxembourg are European Union member states, while Switzerland and Liechtenstein are not. That boundary marks access to the European passport, a tool that allows a security to be offered across the 27 member states on the basis of a single authorisation. For an issuer looking to scale within the EU, the passport is often the decisive criterion.
Below we compare the four frameworks, set out the criteria an issuer should weigh —legal certainty, EU passport, cost and maturity— and explain why Spain and the European Union offer a particularly solid combination.
Spain: LMVSI, ERIR and the MiFID passport
Spain regulates tokenised securities through Law 6/2023 on Securities Markets and Investment Services (LMVSI), which transposes MiFID II and incorporates the framework of the European pilot regime for DLT-based market infrastructures. A Spanish security token is, for all purposes, a financial instrument, with the legal certainty that comes from belonging to the Union's securities markets system.
The LMVSI creates the figure of the Entity Responsible for Registration and Recording (ERIR), tasked with guaranteeing the integrity of the security's record on the blockchain, its operational continuity and a contingency plan allowing the record to be migrated to another network in the event of failure. Entities authorised to provide custody of financial instruments in Spain may act as ERIR, such as credit institutions, investment firms and brokerage agencies supervised by the CNMV.
The European passport as a decisive advantage
By issuing under MiFID II, the Spanish issuer gains access to the European passport: an issuance authorised under the harmonised regime can be marketed throughout the Union without needing separate authorisations in each country. For a project with pan-European ambition, this is the main competitive advantage over non-EU hubs.
Luxembourg: blockchain laws I to IV
Luxembourg, also an EU member state, has built its framework through a series of blockchain laws passed between 2019 and 2024. Blockchain Law I (2019) recognised the use of DLT to register and transfer securities; Law II (2021) introduced the issuance account to hold dematerialised securities on a blockchain; Law III (2023) updated financial collateral arrangements and transposed the European pilot regime; and Law IV (2024) significantly broadened the possibilities for issuing and holding securities via DLT, including the optional figure of a control agent.
As an EU member, Luxembourg combines its tradition as a major fund centre with a highly developed DLT framework and, like Spain, offers access to the European passport. It is a particularly competitive hub for the tokenisation of funds and complex investment products.
Switzerland: the DLT Act
Switzerland is not an EU member, but it has one of the most advanced frameworks in the world. Its DLT Act, in force since early 2021, introduced into the Code of Obligations the category of ledger-based securities (Registerwertrechte): rights that, by agreement of the parties, are registered in a distributed electronic ledger and can only be asserted and transferred through that ledger. It also established rules for DLT trading infrastructures and protections in the event of the custodian's insolvency.
The Swiss framework is mature, technology-neutral and enjoys great international prestige. Its limitation for an issuer focused on Europe is clear: being outside the EU, a Swiss issuance does not enjoy the European passport and, to reach EU investors, must arrange regulatory compliance country by country or through additional structures.
Liechtenstein: the TVTG or Token Act
Liechtenstein, a member of the European Economic Area but not of the EU, enacted, in force since 1 January 2020, the Token and Trusted Technology Service Provider Act (TVTG), also known as the Token Act or Blockchain Act. Its distinctive feature is the Token Container Model: instead of regulating each type of token separately, it defines the token as a container into which any right can be placed, from securities to rights over physical assets or intellectual property.
The TVTG provides a very solid civil-law basis: it recognises tokens as digital containers of rights and ensures that on-chain transfer equates, as a matter of private law, to the transfer of the right represented. In fact, this model influenced the design of MiCA. As with Switzerland, its drawback is that Liechtenstein, not being a full EU member, does not offer the MiFID passport on the same terms as a member state.
Criteria for deciding where to issue
An issuer should weigh four criteria. The first is legal certainty: all four hubs offer it, with solid frameworks and recognised supervisors. The second is the European Union passport, fully available only from Spain and Luxembourg, which is decisive for anyone wishing to market across the 27 member states.
The third criterion is the cost and complexity of structuring the issuance, which depends on the type of security, the intermediaries required and the local provider ecosystem. The fourth is the maturity of the ecosystem: availability of custodians, platforms, advisers and precedents for similar transactions. Switzerland and Liechtenstein were pioneers and have very mature ecosystems; Luxembourg stands out in funds; and Spain has consolidated a complete framework combining legal certainty and access to the single market.
Why Spain and the EU are a solid choice
For an issuer whose target is the European market, issuing from Spain under the LMVSI combines the legal certainty of a financial instrument regulated by MiFID II with direct access to the European passport, without giving up a specific DLT framework and a registration figure, the ERIR, designed for tokenised securities. Compared with non-EU hubs, that combination avoids regulatory fragmentation when reaching EU investors.
To explore the Spanish framework further, you can read our guides on the LMVSI and tokenisation and on regulated tokenisation in Spain.
Frequently asked questions
Which jurisdictions offer the European passport for security tokens?
Only EU member states, such as Spain and Luxembourg. Switzerland and Liechtenstein, not being full members, do not offer the MiFID passport on the same terms, although they have solid frameworks of their own.
What is the ERIR in the Spanish framework?
It is the Entity Responsible for Registration and Recording, provided for in the LMVSI. It guarantees the integrity and continuity of the tokenised security's record on the blockchain and must have a contingency plan. Entities authorised to provide custody of financial instruments may act as one.
What distinguishes the Liechtenstein framework?
The Token Container Model of the TVTG, which allows almost any right to be placed inside a token with a clear civil-law basis. It is a flexible approach that, in fact, influenced the design of MiCA.
Why issue from the European Union?
Because it combines the legal certainty of a regulated financial instrument with access to the European passport, allowing the security to be marketed across the 27 member states on the basis of a single authorisation, avoiding country-by-country permits.
What this means for you
If you are planning to issue a security token, start by defining which investors you want to reach. If your market is the European Union, Spain and Luxembourg offer legal certainty and the European passport in a single package; Spain, moreover, with the specific ERIR figure for tokenised securities. If your priority is a pioneering and very mature ecosystem and your market is not primarily EU-based, Switzerland and Liechtenstein are solid alternatives. In any case, structuring a securities issuance requires specialist legal advice in the chosen jurisdiction.
This content is informational and general in nature; it does not constitute tax, legal or investment advice. For specific decisions, consult a qualified professional.
Sources: Law 6/2023, of 17 March, on Securities Markets and Investment Services (BOE-A-2023-7053); Regulation (EU) 2022/858 on a pilot regime for DLT-based market infrastructures; Luxembourg blockchain laws I to IV (2019-2024); Switzerland, Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology (DLT Act, in force 2021); Liechtenstein, Token and Trusted Technology Service Provider Act (TVTG, in force 2020).
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