US vs. EU vs. Singapore: Global Tokenization Regulation Compared

The Paradox of American Leadership

The United States has the world’s largest tokenized real-world asset market by a substantial margin, despite — or perhaps because of — its regulatory fragmentation. At approximately $18.4 billion in tokenized RWA market capitalization as of early 2026, the US dwarfs the EU, Singapore, and Switzerland individually and collectively. BlackRock, Franklin Templeton, KKR, Apollo, and Hamilton Lane chose the US as the primary jurisdiction for their tokenized product launches. The largest stablecoins are dollar-denominated and US-regulated. The most liquid secondary markets for tokenized assets are US-based.

And yet the US regulatory framework for tokenized assets is — by any objective measure — the least coherent among major financial centers. The EU has MiCA. Singapore has MAS’s comprehensive digital payment token licensing framework. Switzerland has a dedicated DLT Act. The UK has an FMI sandbox. The US has a patchwork of 1930s securities laws, 1970s banking regulations, a 2014 IRS Notice, and a newly formed Crypto Task Force trying to establish new norms through a combination of no-action letters and proposed rulemaking.

The paradox resolves when you understand what drives institutional tokenization: not regulatory clarity in isolation, but the combination of deep capital markets, institutional investor base, established legal system credibility, and dollar liquidity. The US has all four in overwhelming abundance. But the US’s regulatory advantage is eroding as other jurisdictions develop more sophisticated frameworks, and the risk that tokenized asset activity migrates offshore to more permissive or more certain regulatory environments is real and growing.

The EU MiCA Framework: Comprehensive But Crypto-Focused

The Markets in Crypto-Assets Regulation — MiCA — entered into force on June 29, 2023, and became fully applicable in December 2024 after phased implementation. MiCA is the most comprehensive digital asset regulatory framework enacted by any major jurisdiction, covering crypto-asset issuers, crypto-asset service providers (CASPs), and the three categories of “crypto-assets” it defines: asset-referenced tokens (ARTs, including multi-currency stablecoins), e-money tokens (EMTs, single-currency stablecoins), and “other crypto-assets” (including utility tokens and cryptocurrency).

MiCA’s regulatory architecture is landmark for its coverage, but it has a significant limitation for the tokenized RWA market: it explicitly excludes financial instruments regulated under existing EU securities law (MiFID II, UCITS, AIFMD) from its scope. Tokenized securities — tokenized fund shares, tokenized bonds, tokenized equity — fall under traditional financial instrument regulation, not MiCA. For the tokenized RWA market, MiCA is therefore a framework for the stablecoin settlement layer and for crypto-native assets, not for tokenized securities themselves.

The EU addresses tokenized securities separately through the DLT Pilot Regime — a regulatory sandbox mechanism that allows market infrastructure operators (exchanges, clearing houses, settlement systems) to operate with relaxed traditional requirements to test DLT-based securities settlement. The DLT Pilot Regime went live in March 2023 and has attracted applications from several EU market infrastructure operators, but uptake has been limited by its complexity, the temporary nature of the sandbox permissions (maximum 6-year authorization), and the relatively small size of the securities markets it covers.

For comparison with the US approach, MiCA provides significant advantages in clarity — particularly for stablecoin issuers and crypto asset service providers — but the EU’s tokenized securities regulatory architecture is not materially more developed than the US’s. The DLT Pilot Regime is less operationally permissive than the US’s existing ATS framework for tokenized securities trading, and the EU’s securities law requirements (prospectus requirements, MiFID II trading rules) impose compliance costs on tokenized security offerings that are comparable to or higher than the US’s equivalent requirements.

Singapore: MAS Project Guardian and the Institutional Sandbox

The Monetary Authority of Singapore’s Project Guardian — launched in May 2022 — is the most institutionally sophisticated regulatory engagement with tokenized assets of any central bank or regulator globally. Project Guardian brings together MAS, major financial institutions (JPMorgan, DBS Bank, Standard Chartered, HSBC), and protocol developers (Aave, Unisoft) in a structured test environment for institutional tokenized asset applications.

Project Guardian has produced several significant results. Pilot trials have tested: tokenized Singapore Government Securities in cross-currency swaps executed on a public blockchain; tokenized deposits used to fund tokenized trade finance; institutional DeFi liquidity pools for foreign exchange settlement; and tokenized fund products distributed through wealth management channels. Each pilot operates within MAS’s “live but regulatory protected” framework — the institutions have regulatory protection against enforcement for the specific activities tested, but they operate at reduced scale with enhanced reporting to MAS.

MAS’s approach is notable for what it does not do: it does not create new regulations. Instead, Project Guardian tests existing regulatory principles — investment company law, payment services law, securities law — in new technological contexts, allowing MAS to develop regulatory guidance based on real transaction data rather than hypothetical scenarios. The resulting guidance documents are then used to update MAS’s regulatory perimeter on digital assets.

Singapore’s Payment Services Act (PSA), as amended in 2022, creates a comprehensive licensing framework for digital payment token services, digital asset custody, and capital markets products. The PSA’s licensing categories — Major Payment Institution (MPI), Standard Payment Institution — cover a range of digital asset activities at different scale thresholds. Singapore’s approach explicitly includes institutional stablecoin regulation (the MAS Stablecoin Regulatory Framework, effective August 2023) and digital asset fund licensing under the existing Securities and Futures Act.

For the tokenized RWA market, Singapore’s competitive advantage is its willingness to provide regulatory certainty through structured engagement rather than enforcement. The Project Guardian framework gives major financial institutions a defined pathway to test tokenized product structures without facing the regulatory uncertainty that characterizes the US environment. Several major asset managers — including JPMorgan and HSBC — have deployed tokenized product pilots in Singapore that have not (yet) been deployed in the US.

Switzerland’s DLT Act: The Structural Innovation Model

Switzerland enacted its Distributed Ledger Technology Rights Act (DLT Act) in August 2021, amending several existing laws — the Code of Obligations, the Banking Act, the Financial Market Infrastructure Act — to accommodate DLT-based securities and financial market infrastructure. Switzerland’s approach is distinctive: rather than creating a new digital asset regulatory framework, the DLT Act integrates blockchain-based assets into existing Swiss commercial and financial law.

The DLT Act’s most significant innovation is the “ledger-based security” — a new form of financial instrument in Swiss law that exists exclusively on a distributed ledger. Unlike traditional uncertificated securities (book-entry securities held through intermediaries), ledger-based securities are directly issued to and held by investors on the distributed ledger, without the requirement for a custodial intermediary. Transfer of ledger-based securities occurs on the DLT system without needing to go through a central securities depository — a fundamental departure from the traditional settlement architecture.

The DLT Act also creates a new category of regulated market infrastructure — the “DLT Trading Facility” — that combines exchange, central counterparty, and securities settlement system functions in a single entity. This integrated market infrastructure model mirrors what tokenized securities markets actually need — a platform that handles issuance, trading, and settlement in a unified compliance framework — but has been impossible to obtain under traditional Swiss financial infrastructure regulation that requires these functions to be separated.

Switzerland’s SIX Digital Exchange (SDX), operating under the DLT Trading Facility framework, has issued and settled several tokenized bond transactions, including a CHF 150 million bond issued by the canton of Basel-Stadt in 2021. SDX represents the most advanced institutional tokenized securities exchange in the world from a regulatory framework perspective, even if its current trading volumes remain modest relative to traditional markets.

The UK Financial Market Infrastructures Sandbox

The UK launched its Financial Market Infrastructures (FMI) Sandbox in 2024, following the Financial Services and Markets Act 2023’s mandate for a regulatory innovation framework. The FMI Sandbox allows Bank of England and FCA-supervised market infrastructure operators — exchanges, central counterparties, settlement systems — to operate with modified regulatory requirements to test digital settlement technologies.

Unlike the EU DLT Pilot Regime, the UK’s sandbox does not have predetermined authorization limits and is designed for ongoing operation rather than time-limited testing. The Bank of England and FCA have taken a principles-based approach — evaluating sandbox participants against core regulatory objectives (financial stability, market integrity, consumer protection) rather than prescriptive rules — which provides more flexibility than either the EU or the existing US framework.

The UK’s tokenized securities market is smaller than the US’s but growing, supported by the FCA’s constructive engagement with tokenized fund structures and the Law Commission’s 2023 report establishing that digital assets are a distinct category of personal property under English law — a legal clarity that underpins the enforceability of smart contract-settled securities transactions.

BIS Survey: 60 Central Banks and the CBDC Factor

The Bank for International Settlements’ 2024 survey of 86 central banks on CBDC development found that 94% are engaged in some form of digital currency exploration, with 66 having active pilot programs. The BIS’s Project mBridge — involving the People’s Bank of China, Bank of Thailand, UAE Central Bank, and Hong Kong Monetary Authority — has processed $22 billion in cross-border transactions using CBDCs.

The CBDC development landscape is relevant to tokenized securities because wholesale CBDCs — central bank-issued digital currencies used for interbank settlement — are the ultimate settlement asset for tokenized securities markets. If central banks issue wholesale CBDCs that can be used as settlement assets for tokenized security transactions, the reliance on private stablecoins for settlement decreases and the settlement risk profile of tokenized securities improves dramatically.

The US is notable for the absence of a Federal Reserve CBDC program. The Fed’s ongoing research on digital dollars is exploratory, and political opposition to a retail CBDC has been significant. The Trump administration’s executive order prohibiting CBDC development and issuance by the US federal government (January 2025) formally removes the wholesale CBDC as a near-term US settlement option — a constraint that other jurisdictions are not operating under and that may eventually disadvantage the US tokenized securities market relative to jurisdictions that integrate wholesale CBDCs into their settlement infrastructure.

The Regulatory Arbitrage Risk: Where Issuers Are Going Offshore

The practical question for US market participants is whether regulatory uncertainty is pushing tokenized asset issuance offshore to more certain regulatory environments. The evidence is mixed but directional.

Several significant tokenized securities transactions have been structured to list in non-US jurisdictions while targeting US-based investors through private placement exemptions. Tokenized bond issuances on SDX (Switzerland), tokenized fund structures listed in Luxembourg under UCITS or AIFMD exemptions, and Singapore MAS-licensed tokenized fund products have all attracted US institutional investors through Regulation S or Regulation D offshore structures.

The regulatory arbitrage is most visible in the stablecoin market, where Tether’s USDT — issued by a BVI company with Hong Kong operations — dominates global stablecoin volumes despite being structurally non-compliant with emerging US regulatory standards. If the GENIUS Act passes and creates a compliant US stablecoin framework, this offshore dominance may shift back. But for tokenized securities, the offshore trend is more subtle and more concerning: it suggests that the combination of regulatory uncertainty, CBDC absence, and enforcement history is creating structural disadvantages that liquidity and capital market depth alone cannot offset indefinitely.

Exhibit: Global Tokenization Regulatory Frameworks Compared

Strategic Implications: The US Competitive Position

The US tokenized RWA market’s current dominance is a function of legacy advantages — deep capital markets, dollar liquidity, institutional investor base — rather than regulatory leadership. These advantages are substantial and durable, but they are not permanent. The regulatory trajectory matters for long-term market position.

The Crypto Task Force’s work, FIT21’s Senate prospects, and the GENIUS Act’s stablecoin framework together represent the US’s best near-term opportunity to develop the regulatory clarity that its global competitors are already providing. If these initiatives produce workable frameworks within the next 12-18 months, the US will consolidate its market leadership with regulatory infrastructure to match its financial infrastructure. If they stall or produce inadequate frameworks, the offshore migration risk will intensify.

For institutional investors assessing global tokenized asset opportunities, the regulatory comparison framework matters for counterparty risk, settlement risk, and legal enforceability. A tokenized bond settled on Switzerland’s SDX under a ledger-based securities legal framework offers regulatory certainty that a comparable US instrument currently does not. As institutional due diligence processes become more sophisticated about tokenized asset risks, jurisdictional regulatory certainty will be an increasingly important factor in product selection — creating competitive pressure on US issuers and platforms that the current market leadership position may not fully cushion.

The SEC digital assets framework and the emerging OCC digital asset authority together form the foundation of whatever US leadership position develops. Market participants who engage with both frameworks — who submit comment letters, participate in Task Force roundtables, and structure transactions that advance the regulatory frontier — are the most likely to shape the framework in ways that preserve US market leadership as global competition for tokenized asset market share intensifies.