Tokenisation Beyond Crypto: Legal Considerations for Real-World Asset Platforms in Singapore
- Eastern Mezzanine
- May 5
- 5 min read
Updated: May 7
What started as a decentralised alternative to traditional finance has since undergone a profound transformation. Today, blockchain technology and tokenisation have evolved beyond being synonymous with cryptocurrencies to give rise to real-world assets (RWAs). Imagine owning fractional shares of prime real estate, simplifying the trade of private debt, or even greater liquidity for luxury bags—all streamlined through digital tokens on a blockchain.
Right here in Singapore, RWA tokenisation has long captured the attention of the Monetary Authority of Singapore (MAS) due to its potential to improve efficiencies in wholesale funding markets. Encapsulated by the Project Guardian initiative, MAS collaborates with the financial industry to explore RWA tokenisation.
Whether you are a venture capitalist (VC) seeking the next disruptive opportunity, a fintech startup solving financial incumbencies with innovative solutions, or a private bank looking to offer novel investment products, understanding Singapore’s legal and regulatory landscape around RWA tokenisation is essential.
This article introduces you to the legal considerations for RWA tokenisation platforms in Singapore, highlighting the key regulations you need to comply with to operate legally.
First of all, what is RWA tokenisation?
As the term suggests, RWA tokenisation tokenises real-world assets on a blockchain, creating digital tokens that represent ownership rights or economic interests in tangible assets like real estate, equities, bonds, commodities, and machinery. These tokens can be issued, traded, and managed more efficiently than their traditional counterparts.
Within the blockchain industry, RWA tokenisation is perceived as one of the largest market opportunities. According to an April 2025 report by Ripple and Boston Consulting Group (BCG), RWA tokenisation is projected to rise exponentially from USD 0.6 trillion in 2025 to USD 18.9 trillion by 2033, reflecting a meteoric CAGR of 53%.
Looking at the benefits of RWA tokenisation, it is not hard to see why it is so lauded. Apart from increasing the liquidity of traditionally illiquid assets like real estate and equities, RWA tokenisation also leverages blockchain’s smart contracts and immutable record-keeping features to improve efficiency and transparency. It also significantly reduces the barrier to entry, as it enables smaller investment amounts via fractional ownership of larger assets.
How are RWA tokens legally classified in Singapore?
Many are the benefits of RWA tokens, but they must still be appropriately legislated in Singapore. Typically, RWA tokens are only regulated by MAS if they constitute a capital markets product (CMP) under the Securities and Futures Act (SFA).
To determine if a RWA token is a CMP, MAS adopts a substance-over-form approach. This means that it does not focus on its correlation to blockchain; instead, it considers the token’s rights and economic benefits.
The following are some examples of tokens constituting a CMP under the SFA:
Securities: This includes shares, debentures (long-term securities with fixed interest), and units in a business trust.
Example: A token representing a fractional interest in a corporate bond is usually classified as a debenture legislated by the SFA.
Units in a collective investment scheme (CIS): A CIS collates financial contributions from participants for investments. Participants do not have control over their properties and assets in such schemes.
Example: Tokens representing shares in a fund managed by an asset manager are usually classified as units in a CIS under the SFA.
Derivatives contracts: Tokens conferring rights based on the value of an underlying asset or index are likely derivatives under the SFA.
Implications of SFA classification
If an RWA token is classified as a CMP, it will be subject to several regulatory requirements under the SFA, both for the issuer and potentially the platform operator. The first of these requirements you must bear in mind is the prospectus requirements. In essence, your token offerings will need a detailed prospectus registered with MAS, unless you are targeting accredited or institutional investors, small offers, or private placements.
The next requirement is licensing. Should you have any dealings with CMPs, you are required to apply for a Capital Markets Services (CMS) licence under the SFA. As a licensed entity, you are obligated to adhere to MAS’s rules on fair dealing, disclosure, risk management, and investor protection, as stipulated by its conduct of business requirements.
The final requirement, and arguably the most important, is AML/CFT obligations. With MAS placing a greater emphasis on anti-money laundering and countering the financing of terrorism measures, it behooves you to implement stringent standards in your operations.
What if your RWA token isn’t treated as a capital markets product?
There are instances when RWA tokens do not fall under the SFA. To illustrate, consider a token representing direct, individual ownership of a non-fungible luxury watch. Instead of a tool for investment pooling, this watch is a personal possession that is part of a hobbyist’s collection. The watch may not be considered a security or CIS unit, but rather treated as a digital certificate of authenticity and ownership.
While the watch in this scenario is technically not an SFA product, the platform facilitating all transactions related to its exchange is still subject to other relevant legislative frameworks. Most notable of these frameworks is the Payment Services Act (PSA).
Enter the Payment Services Act (PSA) in regulating RWA tokens
While the SFA regulates the investment product aspect of RWA tokens, the PSA regulates the payment facilitation aspect. A given platform may require licenses under both acts depending on the nature of its tokens and business activities.
Under the PSA, MAS has identified a few categories of payment services that require legislation. The first of these is account issuance, where accounts storing fiat or stablecoin value are provided to customers.
Domestic and cross-border transfers also fall under MAS’ purview, facilitating fiat purchases and sales of RWA tokens.
Last but certainly not least, digital payment token (DPT) services that facilitate the exchange of RWA tokens are also regulated by the PSA. This is especially so if the platform in question enables users to buy RWA tokens with fiat currency or cash out their fiat proceeds.
Learn more about the payment services legislated by the PSA here: Who’s Licensed, and How: A Breakdown of Payment Services Licences in Singapore
Now that I know the regulations behind RWA tokens, what’s next?
Good question. The immediate answer is to sharpen your regulatory strategy, executing due diligence to clarify the regulatory status of your proposed tokens and platform activities. Determine the necessary license(s) you need to apply for.
Furthermore, given MAS’s emphasis on AML/CFT measures, you must rigorously apply robust KYC and AML procedures that are compliant with both SFA and PSA requirements. At the same time, ensure investor protection by implementing disclaimers, risk warnings, and suitability assessments—especially if you target retail investors.
Once you’ve got your bases covered, you will also need to examine the robustness and security of your technology. Ensure you deploy reliable custody solutions to safeguard the RWA tokens and potentially physical assets.
If you market tokens or onboard investors outside Singapore, relevant foreign regulations may also apply on top of the local ones.
Build your stake in the future of asset ownership with Eastern Mezzanine
With RWA tokenisation presenting a compelling frontier for innovation in Singapore and the rest of the world, the time is ripe for you to establish your position in this space. But with so many regulations in place to safeguard all parties involved, getting the requisite approvals to set up a business can be difficult.
This is why you should work with Eastern Mezzanine to explore RWA tokens, regardless of whether you are a VC, fintech startup, private bank, or any other institution. We are a dedicated team of legal counsels equipped with deep expertise in payment services, and this naturally includes an expert understanding of RWA tokenisation and all its regulatory requirements.
