An Audemars Piguet Royal Oak Jubilee ref. 14802 and Digitalizing its Ownership Through Tokenization

I guess you’re well aware that we, at MONOCHROME, are not enamoured by watches that comprise something else than gears, pinions, plates, bridges and springs. Nicely finished metallic parts, 100% mechanical. As soon as a battery (or worse) is involved, we’re out. Now guess what our first response is to anything blockchain, tokenization and the likes… Yet, here’s an initiative that somehow sparked our interest, and out of curiosity, we decided to ask some questions before we arrive at our usual conclusion.

Why? Well, the first thing that caught my attention was the mention of an Audemars Piguet Royal Oak ref. 14802, with a salmon dial. Let’s say that this one topped my personal wish list for many years, and actually, it still does (although, with current prices, it’s far out of reach). Huber, a large retailer in Liechtenstein (and for those unfamiliar with Liechtenstein, it’s a small principality, located between Switzerland and Austria), together with the VP Bank in Liechtenstein came up with a new purpose for tokenizing a watch. We’re talking to Thomas von Hohenhau from VP Bank and Hansjoerg Roshard from Huber in Lichtenstein to learn more about the tokenization of my dream watch.

Frank Geelen, MONOCHROME – What is exactly this “tokenization of a watch”?

Thomas von Hohenhau (VP Bank) and Hansjoerg Roshard (Huber) – Tokenization is the process of mapping real-world rights onto a digital blockchain. In the case of the watch, the tokens represent ownership rights, meaning that the holder of the tokens is also the legal owner of the underlying watch. Thus, for the first time, ownership rights in real assets become processable, transferrable and divisible. This process is possible due to Liechtenstein’s innovative “Blockchain Act” – the TVTG – which guarantees the legal connection between the token and the physical object.

We can’t see or touch the watch, we can’t admire the beautifully finished movement or feel how comfortable it is on the wrist. So what purpose does this serve?

While nothing can replace the experience of wearing the physical watch, we do not see the token as a competing product. In fact, the token – as a digital representation of ownership – is a complementary solution. For instance, for every watch collector there comes the time to think about passing on the collection down to the next generation. Exactly in this case, tokens are the perfect mechanism to ensure an equal and fair distribution of the collection among all beneficiaries as co-owners. In addition, the co-owners have a real-time overview of their positions in our e-Banking, asset statements and tax reports. Consequently, management of your collection becomes as easy as checking your bank account, because essentially it is done in your bank account.

How is the value determined and will this be updated periodically? 

The value is determined by experts and the periodicity of the value is determined by the customer, but at least every 3 years.

How do customers see this or respond to this tokenization as a service?

When we launched our service last December, it was important for us to do it with an actual client. Thus, at the very beginning, we conducted surveys among our key clients to identify the most relevant areas for tokenization services. The results highlighted overwhelming interest in collectable assets, such as fine art or watches. Consequently, we were not only able to tokenize the first painting at launch, but also received exciting client requests immediately afterwards. In summary, we believe that our clients especially value our approach, which combines innovation with our tradition as a trusted private bank. Instead of talking about the technicalities of tokenization, we are usually focused on actual solutions to problems that this service can provide. This is received very well by our clients.

Is it acknowledged by banks and maybe by the government?

This is one of the most important points that we want to emphasize: Tokenization with VP Bank means tokenization in accordance with the novel “Blockchain Act” of Liechtenstein. This ensures the necessary acknowledgement by the government and other counterparties. Furthermore, VP Bank is a registered service provider for tokenization under this law, which underpins our high-quality standards, expertise and regulatory compliance. In this regard, we have a glaring advantage over other tokenization providers that operate in unregulated grey areas.

How did the collaboration between Huber and VP Bank start? 

The relationship between Huber and VP BANK takes place on different levels. On the one hand, HUBER has been a client of VP Bank for many years and enjoys the service of the long-established credit institution by Liechtenstein standards.

As part of the good cooperation, HUBER became an important sponsor of the VP Bank Rally and offered a vintage Omega Speedmaster Mk. 4.5 from the 1980s as a special prize at the last event at the end of August 2021. This was presented to the participants after the driver briefing and made palatable.

On that evening, there were three men at this event who have had certain things in common since that date. Thomas von Hohenhau, Head of Client Solutions at VP Bank, Dario Pergolini racing driver and automobile expert owner of PERGOLINI MOTORSPORT Est. and Hansjörg Roshard watchmaker and manager of the vintage department at HUBER.

Thomas von Hohenau and Hansjörg Roshard met a few times for lunch and talked about watches and life. Thomas himself is a passionate watch collector and a loyal customer of HUBER. VP Bank’s field of activity includes digital assets. As a watch fan and digital finance expert, he immediately came up with the idea of the first tokenization of a vintage watch in the context of a customer event in the legally secure area of Liechtenstein.

The choice of the Royal Oak 14802ST is on the one hand dedicated to the 50th anniversary of this design icon, and, on the other hand, the watch belongs to one and the same owner for 30 years, Norman J. Huber, owner and CEO of HUBER Uhren Schmuck Anstalt. Thus, the watch will always belong to the collection of the owner’s family and remain in the heart of the company.

With the decision to hold this event, it was immediately clear that the event can only take place in the new Vintage Lounge of the HUBER company and an exclusive small audience will attend this showcase.