The Bermuda Monetary Authority has published a discussion paper seeking stakeholder input on whether Bermuda’s existing legal and regulatory frameworks need targeted guidance or changes to address asset tokenisation, including its risks and opportunities. The paper notes that Bermuda’s digital asset framework already provides a legal basis for tokenisation by treating it as a regulated digital asset business activity, and frames its approach around a technology-neutral “same risk, same regulatory outcome” principle while excluding central bank digital currencies and tokenised deposits from scope. The discussion paper canvasses potential regulatory and legal issues across tokenised investments and investment funds, insurance, and alternative assets, alongside cross-cutting themes. It highlights possible regulatory overlap for tokenised investments that may qualify both as “digital assets” under the Digital Asset Business Act 2018 and as “investments” under the Investment Business Act 2003, and asks whether definitions and perimeter capture new actors such as tokenisation platform providers and other lifecycle service providers. For tokenised funds, it points to the current application of the Investment Funds Act 2006 and potentially the Digital Asset Issuance Act 2020, and seeks views on potential duplication from dual authorisation, the use of DLT-based registers, governance and service-provider role convergence, and challenges created by continuous token transfers for valuation, reporting and liquidity management. The paper also explores tokenisation in insurance, particularly insurance-linked securities and how tokenised structures might interact with existing innovative insurer classes and established ILS infrastructure, and examines tokenisation of real estate (primarily via SPV-based models), precious metals (including 1:1 backing and audit/verification expectations) and energy and environmental assets (including risks such as double counting). Further sections address permissioned versus permissionless DLT, platform convergence (including universal wallets), AML/ATF implications of embedded compliance controls, conduct expectations, cyber risk across the token lifecycle, and potential financial stability vulnerabilities such as dependency risk, liquidity mismatches, leverage and concentration. Comments are requested by close of business on 9 January 2026, with feedback intended to inform a subsequent consultation paper with more targeted proposals, expected in early 2026.

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