Tokenization regulation
Tokenization regulation: how six jurisdictions treat tokenized assets
Tokenization is generally legal in the jurisdictions covered here, but it does not escape existing law. Regulators in the EU, the US, Singapore and Hong Kong generally treat a tokenized security as a security. The UAE splits rules by zone, and El Salvador has a dedicated digital-asset law. The answer always depends on the structure.
Last updated:
Educational overview, not legal, tax or investment advice. Regulation changes, and the answer for any project depends on the asset, the structure, the investors and where they are. Consult qualified counsel in each jurisdiction before you issue, offer or market anything. Last reviewed 16 October 2026.
Is tokenization legal?
In each jurisdiction covered here, generally yes. No regulator in this overview prohibits recording ownership of an asset on a blockchain. What they regulate is the instrument being offered, the way it is offered and the firms involved. A tokenized share or bond is generally still a share or bond, with the same offering, disclosure and intermediary rules as its traditional form.
How do tokenization rules compare by country?
| Jurisdiction | Main regulator(s) | Main framework | Guide |
|---|---|---|---|
| El Salvador | CNAD | Ley de Emisión de Activos Digitales (LEAD), 2023 | El Salvador |
| European Union | ESMA and national competent authorities | MiFID II for financial instruments; MiCA for other crypto-assets; DLT Pilot Regime | EU and MiCA |
| United States | SEC; FINRA for broker-dealers | Securities Act and Exchange Act; Reg D, Reg S, Reg A | United States |
| United Arab Emirates | VARA (Dubai), DFSA (DIFC), FSRA (ADGM); federal Capital Market Authority | VARA regulations; DFSA Investment Tokens; ADGM digital securities | UAE |
| Singapore | MAS | Securities and Futures Act 2001; MAS tokenisation guide | Singapore |
| Hong Kong | SFC (HKMA for registered institutions) | Securities and Futures Ordinance; SFC tokenisation circulars | Hong Kong |
What do these regulators have in common?
- EU: ESMA says the technological format should not determine classification, and tokenised financial instruments remain financial instruments.
- US: SEC staff say the format in which a security is issued does not affect how the federal securities laws apply.
- Singapore: MAS applies “same activity, same risk, same regulatory outcome” and looks at economic substance.
- Hong Kong: the SFC applies “same business, same risks, same rules” and calls tokenised securities traditional securities with a tokenisation wrapper.
- UAE: the DFSA and the FSRA treat security-like tokens as securities in their financial free zones.
El Salvador is the exception in approach: under LEAD Art. 3, digital assets are not considered títulos valores, and offerings follow the LEAD and CNAD regulations.
How does Libertum fit in?
Libertum is a software platform (T-Suite). Libertum, S.A. de C.V. holds an El Salvador Digital Asset Service Provider (DASP) licence from the Comisión Nacional de Activos Digitales (CNAD), registry entry PSAD-0094; it has effect in El Salvador only, does not authorise issuance and confers no licence, passporting or authorisation in the EU, the US, the UAE, Singapore or Hong Kong. Libertum is not a LEAD certifier. The software enforces compliance rules on-chain with ERC-3643, CIP-113 and authorised XRPL tokens (country allow/restrict lists, maximum balance, hold time, KYC claims) and runs KYC/KYB via Sumsub. Issuers remain responsible, with their own counsel, for registration or exemption analysis in every jurisdiction. See Licences.
Jurisdiction packs in Structuring
The Structuring module (Beta) has jurisdiction packs for El Salvador CNAD/LEAD, US SEC Reg D/Reg S, EU MiCA/MiFID II and Cayman Islands CIMA. The Cayman pack is counsel-reviewed and published; the other three are drafts marked “Beta — pending counsel review”. Structuring is a software tool for issuers and their counsel, not a Libertum legal or structuring service.
Transcript: Structuring demo
Before you can tokenise an asset, you have to structure it.
That usually means months of lawyers, templates and back-and-forth, before a single investor sees the offering.
In Structuring, you start a project and pick the regulatory pack: El Salvador's CNAD, Europe's MiCA, or the United States.
Describe the deal in plain language, and upload what you already have.
Libby reads it and fills in the intake for you. Every value comes with its source, for you to accept, edit or dismiss.
Readiness shows what's complete and what's still missing, phase by phase.
Then Libby drafts the documents the pack requires, citing the facts and the rules behind each section, ready for your counsel.
The checklist tracks every artefact, including the platform policies you sign electronically.
Share a secure link with your lawyer to review and comment, without creating an account.
When it's ready, one click turns the project into an offering.
For funds, asset managers and fund administrators: go from asset to offering pack in days, not months. Book a demo at libertum.io.
Jurisdiction guides
- El Salvador: LEAD and the CNAD Digital Assets Issuance Law, certifiers and DASPs
- European Union: MiCA and the DLT Pilot When MiCA applies and when MiFID II does
- United States: SEC rules Howey, Reg D, Reg S, Reg A+
- UAE: VARA, ADGM and DFSA Three regimes in one country
- Singapore: MAS and the SFA Capital markets products and Project Guardian
- Hong Kong: SFC circulars Tokenised securities and authorised products
- Structuring Jurisdiction packs for issuers and their counsel
- Licences What Libertum's DASP licence does and does not cover
- Security token platform How compliance is enforced on-chain
Tokenization regulation FAQ
Is tokenization legal?
Generally yes in El Salvador, the EU, the US, the UAE, Singapore and Hong Kong, but tokenizing an asset does not take it outside existing law. Whether an offering is lawful depends on the asset, the structure, the investors and where they are.
Is a security token always a security?
If it represents a share, bond or fund unit, regulators in the EU, US, Singapore and Hong Kong generally treat it as one. El Salvador’s LEAD instead says digital assets are not títulos valores. Classification is always case by case.
Can one licence cover every country?
No. Each jurisdiction has its own regulator and rules. For example, Libertum’s El Salvador DASP licence has effect in El Salvador only.
Does Libertum provide legal advice?
No. Libertum provides software. Issuers need their own counsel in each jurisdiction where they issue or offer.
Primary sources
Last checked:
- ESMA — Guidelines on the qualification of crypto-assets as financial instruments (19 March 2025) — EU: tokenised financial instruments remain financial instruments; MiCA Art. 2(4)(a) boundary.
- ESMA — DLT Pilot Regime — EU: DLT Pilot Regime, Regulation (EU) 2022/858.
- SEC — Statement on Tokenized Securities (28 January 2026) — US: format of issuance does not affect application of the federal securities laws (staff statement).
- SEC — Offering pathways — US: registered offerings and exempt pathways including Rule 506(b), Rule 506(c) and Regulation A.
- VARA — Virtual Assets Regulatory Authority — UAE: VARA regulates virtual assets in Dubai, mainland and free zones except the DIFC.
- DFSA Rulebook — Investment Tokens framework (25 October 2021) — UAE: DFSA as regulator of the DIFC; Investment Tokens framework.
- ADGM — Digital Assets — UAE: the FSRA treats tokens with the characteristics of a security as securities.
- MAS — Guide on the Tokenisation of Capital Markets Products (14 November 2025) — Singapore: technology-neutral approach; 'same activity, same risk, same regulatory outcome'; SFA applies to tokenised capital markets products.
- SFC — Circular on intermediaries engaging in tokenised securities-related activities (2 November 2023) — Hong Kong: 'same business, same risks, same rules'; tokenised securities are traditional securities with a tokenisation wrapper.
- Ley de Emisión de Activos Digitales, Decreto Legislativo N.° 643 (CNAD) — El Salvador: LEAD framework for public offerings of digital assets; creation of the CNAD; Art. 3 exclusion from títulos valores.
Talk to our team about your structure
See how T-Suite enforces the rules your counsel sets, and how the Structuring jurisdiction packs help prepare the documents your counsel reviews.