On July 11, 2022, during the "Culture Day at the Warsaw Stock Exchange" conference, a project titled "Private Market" was presented. As previously announced, the Warsaw Stock Exchange (GPW) wants to support the development of the art market. The GPW Group's strategic initiative will involve the development of a technological project for tokenizing non-financial assets based on blockchain technology.

The Private Market platform pursues the goal of diversifying business and building technological products within the WSE. This project aims to develop the art market by ensuring independent patrons of culture. The initiative aims to reach a broad audience by providing access to works of art through tokenization. The idea is to provide access to a given work to many different investors by tokenizing it, or more figuratively, "splitting" ownership of the work into many smaller, most likely equal, shares. Consequently, this is intended to increase market access, including for those who lack the "deep pockets" often associated with art trading.

To quote Mr. Adrian Kutnik, Director of the Private Market Department at the Warsaw Stock Exchange – "We believe that by transferring the high standards of the capital market to the market of tokenized works of art, we could radically increase the transparency of this market to the benefit of all its participants, while also reducing entry barriers for collectors with smaller portfolios and less knowledge. Just as we do in the capital market."

Investing in art for business purposes is a common practice worldwide. Unfortunately, participation in this market still requires extensive knowledge or the expertise of often hard-to-find and relatively exclusive specialists. Applying the principles of capital market law regarding verification, certification, and facilitating the trading of specific tokens representing parts of a selected work of art may prove to be an excellent method for introducing the idea of ​​investing in culture to individual investors, thus attracting new patrons of the arts.

Blockchain technology seems to be a tailor-made solution for organizing a digital source of art distribution. Furthermore, it is another application of the tools offered by technology, shortening the path between a potential recipient and a given "product," in this case art. Perhaps most importantly, the project described above represents direct participation in the cryptocurrency market for one of the most important entities in Polish economic activity. It is hoped that this will translate into greater adoption of innovative solutions offered by blockchain technology and, consequently, a more favorable approach from the regulator.

We will certainly be analyzing the development of the “Private Market” project with great interest and we invite you to follow it with us.

This alert is for informational purposes only and does not constitute legal advice.

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