Consultation Paper - Asset Tokenisation (2026-04-09)

Summary

This is a Bermuda Monetary Authority (BMA) consultation paper proposing a regulatory framework for asset tokenisation, building on a November 2025 Discussion Paper. It does not create a new regulatory regime but clarifies how existing legislative frameworks apply to tokenised assets, distinguishing between 'digital twins' (tokens representing off-chain assets) and 'native tokens' (assets created and existing solely on distributed ledger technology).

• Harmonised definition: Proposes a single 'tokenised investment' definition introduced via the Investment Business Act 2003 (IBA), cross-referenced in the Investment Funds Act 2006 (IFA), Fund Administration Provider Business Act 2019 (FAPBA), Digital Asset Business Act 2018 (DABA) and Digital Asset Issuance Act 2020 (DAIA).
• Cross-regime exemptions: Proposes tailored exemptions to avoid duplicative or unnecessary dual licensing for entities operating tokenisation activities across overlapping frameworks.
• Entity-specific requirements: Sets out proposed requirements covering due diligence and asset verification, token standards and technical implementation, risk management, outsourcing and vendor management, reconciliations/attestations/proof of reserve, and secondary market operations, differentiated for digital twins versus native tokens.
• Conduct and cyber risk: Proposes conduct and cyber risk requirements applicable to entities dealing in digital twins and native tokens.
• Investment funds: Addresses tokenised investment funds and the responsibilities of fund service providers (investment managers, administrators/transfer agents, custodians), with operators retaining ultimate responsibility for compliance and service provider fitness under the IFA.

The paper is issued alongside a companion Stakeholder Letter and invites industry feedback on numbered consultation questions throughout. No proposal is final; the term 'should' throughout the CP denotes proposed, not binding, requirements until after the consultation concludes and feedback is considered.

Key obligations

• Stakeholders wishing to comment must submit feedback to fintech@bma.bm by close of business on 30 June 2026.
• Operators of tokenised investment funds must conduct due diligence when appointing service providers, maintain oversight mechanisms to monitor ongoing compliance, and replace service providers that fail to meet requirements.
• Entities engaging in tokenisation activities remain fully subject to all existing regulatory obligations under their respective licensed frameworks in addition to any tokenisation-specific proposals.

Applies to

investment business licensees under the IBA, investment funds and fund operators under the IFA, fund administration providers under FAPBA, digital asset business licensees under DABA, digital asset issuers under DAIA, tokenisation platform providers, custodians, Primary Tokenisers and Secondary Offerors

Deadlines

• 30 June 2026: Deadline for industry and stakeholders to submit comments on the Consultation Paper to fintech@bma.bm