The Bermuda Monetary Authority (BMA) published a consultation paper setting out proposed regulatory clarifications and additional requirements for asset tokenisation under Bermuda’s existing financial services regimes, rather than creating a new standalone framework. The proposals focus on the “asset leg” of tokenisation and distinguish between “digital twins” (on-chain representations of off-chain assets) and “native tokens” (issued and existing solely on distributed ledger technology), with requirements intended to be proportionate and applied on a substance-over-form basis. At the architecture level, the BMA proposes a harmonised definition of “tokenised investments” across the Investment Business Act 2003, Investment Funds Act 2006, Fund Administration Provider Business Act 2019, Digital Asset Business Act 2018 and Digital Asset Issuance Act 2020, supported by optional mirrored exemptions aimed at avoiding unnecessary dual licensing where activities relate exclusively to tokenised investments. It also signals a review of the Investment Business Act’s investment categories, proposes targeted extensions of the Digital Asset Business Operational Cyber Risk Management and Custody Codes to tokenisation activities, and contemplates amendments to the Investment Funds Act to explicitly allow tokenised fund registers and introduce tokenisation-specific disclosures. Operationally, the paper proposes role-based requirements for Primary Tokenisers, Secondary Offerors and Custodians, including 1:1 reserve asset expectations, reconciliation and proof-of-reserve approaches for digital twins, smart-contract-centric controls for native tokens, and baseline cyber governance measures such as minimum timelocks and multi-signature thresholds. Comments are requested by 30 June 2026, after which the BMA plans to assess feedback and determine next steps, which may include legislative amendments, guidance notes or other regulatory actions to implement a final framework.
Bermuda Monetary Authority 2026-04-09
Bermuda Monetary Authority launches consultation on asset tokenisation framework and dual-licensing exemptions
The Bermuda Monetary Authority has issued a consultation paper proposing regulatory clarifications and additional requirements for asset tokenisation within existing financial services regimes, focusing on the “asset leg” and distinguishing between “digital twins” and “native tokens” on a substance-over-form basis. The paper proposes a harmonised definition of “tokenised investments” across multiple Acts, mirrored exemptions to avoid dual licensing, extensions of existing digital asset cyber and custody codes, amendments to enable tokenised fund registers and disclosures, and role-based requirements for Primary Tokenisers, Secondary Offerors and Custodians, including 1:1 reserve expectations, proof-of-reserves, smart contract controls and baseline cyber governance.