Shifting sands: a potential new world order for RWAs

An RWA, or real world asset, is a cryptoasset that represents something that exists off the blockchain: a share, a bond, a building, even a stock of uranium. The idea has been around for a decade, but in recent months it has moved to the centre of the conversation.

That is partly new use cases with real value, such as tokenised uranium, which allows investment without ever taking delivery. It is partly better infrastructure, such as stablecoins making settlement more reliable. But a third factor is often overlooked, and is arguably the most important of all: evolving regulation. If a model cannot operate legally, it is dead on arrival.

This article looks at the main regulatory pitfalls for RWA projects, and the solutions, before turning to the Berne Financial Services Agreement (the BFSA) and what it changes.

A note for founders first. If you are tokenising your own company's shares, you are likely to be in the simplest category discussed here: a token that mirrors a share is generally regulated like the share. Much of what follows concerns asset backed and yield bearing projects, where the traps run deeper.

Everything turns on classification

Since the beginning, the core question for any RWA project has been whether the token is a security, and if so what kind. The answer drives everything: the cost of running the project, and who is allowed to invest in it.

Outside the USA, which applies its mercurial Howey test, and Canada, which takes a similar approach, most jurisdictions classify a token by comparing its features against existing asset types. If a token has the same features as an existing type of security, it is usually regulated in the same way as that security. The design decision, in other words what features to give the token, has a huge impact on its regulatory treatment and on whether the project is commercially viable at all.

Where the token gives rights to a security, tokenised equity, say, or a tokenised bond, it will generally be regulated in the same way as the security it mirrors. Care is needed where a token deliberately changes the nature of the underlying, for example converting a variable yield into a fixed one guaranteed against the company's assets. That can change the regulatory treatment, and it introduces commercial risk of its own, such as solvency risk, so it has to be weighed very carefully.

The fund trap

The bigger trap is the fund. Most jurisdictions define a fund broadly, technically a collective investment scheme (CIS) or collective investment undertaking (CIU), and a surprising range of RWA projects can fall within the definition. A token that pays a yield is a particular concern, whatever the yield is called. So is a token where someone exercises discretion to increase the value of the underlying asset: if the asset is art, for example, choosing to place it in exhibitions to build its profile may become on an issue.

Falling into the CIS / CIU category can sink a project. Funds are heavily regulated, so substantial fees are needed just to be economically viable. Selling a fund to the general retail public is more burdensome still, and where the underlying assets are cryptoassets it may not be permitted at all. That defeats the usual point of tokenising an asset in the first place: letting ordinary investors own an affordable fraction of it.

The traditional workaround, and its limits

Much effort has therefore gone into keeping RWAs outside the CIS / CIU definition. The traditional approach treats the token like a warehouse receipt. The underlying asset sits in custody, and the token gives the holder rights to it, including the right to take delivery. Any discretion is baked in at the start: buyers agree in advance exactly how the asset will be dealt with, so no one exercises judgement on their behalf later.

The weakness is cost. Custody has to be paid for indefinitely, and once the tokens are sold there may be no continuing income stream to pay it from. Some projects answer this by requiring holders to take delivery of the asset after a set period, five years in custody, say. That solves the custody bill but raises a fresh question: does a forced future delivery turn the token into a derivative? Usually not. A delivery obligation of this kind is generally treated as serving a commercial purpose rather than an investment one, which keeps it outside derivatives regulation.

The deeper problem is that these workarounds are restrictive, and they cut against the direction of travel. Even traditionally 'unregulated' tokens are being drawn steadily into regulation, often on the same basis as securities generally. The instinct of many firms in this market has been to avoid the supposed cost of regulation. That thinking is increasingly out of date. New pathways are making the regulated security token the cheaper option, and the so called unregulated route the expensive one.

A newer answer: the AMC

This is where a newer structure is gaining ground: the Actively Managed Certificate, or AMC. An AMC is technically a debt instrument, like a bond. But where a normal bond pays a fixed rate of interest, an AMC's payments rise and fall with a portfolio of underlying assets that someone actively manages. In practice it behaves much like a fund while not being regulated as one. That makes it cheaper to operate, and it can be sold to a broader market than a CIS / CIU.

Why Switzerland, and why now

Jurisdiction matters too, and choosing well can create a genuine regulatory advantage. For anyone planning to sell AMCs into the UK, Switzerland deserves particular attention. Under the BFSA, in force since January 2026, the UK and Switzerland recognise each other's regulatory and supervisory regimes as achieving equivalent outcomes, which means UK and Swiss firms can sell securities to each other's markets on a cross border basis. 'Unregulated' qualifying cryptoassets get no benefit from the BFSA. A regulated, tokenised Swiss AMC, by contrast, can offer a comparatively cheap and straightforward way to sell an RWA project into the UK.

The landscape is still moving, but one thing is clear. The right regulatory structure can open markets, save time and create an edge over competitors. Ignoring regulation can destroy an otherwise excellent project, because regulators can force it to close. As always, execution is key, and the role of regulation in execution should not be underestimated.

Legal View is contributed by gunnercooke LLP. This article is provided for general information only and does not constitute legal, financial, or investment advice. The regulatory treatment of tokenised assets and digital securities varies by jurisdiction and continues to evolve. Readers should seek independent professional advice before making any financial, legal, or regulatory decisions.