How Global Regulations Are Shaping Real-World Asset Tokenization in 2025

Regulators around the world share similar goals: protecting investors, ensuring financial stability, and providing an optimal environment for responsible innovation. 

This article explores how regulations across the US, Europe, Asia, the Middle East, and Latin America shape real-world asset (RWA) tokenization, clarifies key differences between these jurisdictions, and examines whether increasing global regulatory collaboration could finally drive mainstream adoption of asset tokenization.

What Are the Key Global Regulations Impacting Tokenized Assets?

US regulations classify crypto assets as either securities or commodities. The SEC regulates securities with strict rules, so issuers often seek exemptions to avoid full compliance. In contrast, the EU has adopted a unified regulatory approach with the MiCA directive to provide clarity and stability for all crypto assets. 

Meanwhile, many Asian financial hubs have clarified their securities regulations to support digital finance innovations. For example, Singapore’s and Hong Kong’s authorities now treat tokenized securities like traditional ones, and Japan’s updated regulations boost security token offerings.

Regulatory Crossroads: Understanding the SEC, CFTC, and the Future of Tokenized Assets

In the US, crypto assets are classified as securities or commodities, which impacts how they are issued, traded, and regulated. The Securities and Exchange Commission (SEC) governs securities, which includes most tokenized assets. 

If a token signifies ownership, investment contracts, or profit expectations, it is likely classified as a security. Securities fall under SEC registration and investor protection requirements. However, issuers often make use of exemptions—such as Regulation D and Regulation A+, or certain state-specific exemptions— to avoid having to fully comply with standard SEC regulations. 

The Commodity Futures Trading Commission (CFTC) oversees commodities. While cryptocurrencies like Bitcoin are labeled commodities, Ethereum’s status can shift depending on its use, particularly with staking. This lack of clarity leads to regulatory ambiguity and questions regarding whether the SEC or CFTC is the governing authority. 

The US uses the Howey Test to determine if an asset is a security. The test includes four criteria: an investment of money, profit expectations, common enterprise, and dependence on the efforts of third parties. If an asset meets these criteria, it is a security regulated by the SEC. 

The US regulatory approach regarding digital assets has developed from strict enforcement of existing rules to a more collaborative industry outlook. Legislative developments, such as the GENIUS Act, aim to create a regulatory framework for payment stablecoins. 

While efforts to establish a more straightforward regulatory environment are underway, consumer protection and market stability challenges persist. Navigating the evolving legal landscape requires digital asset participants to stay informed on SEC and CFTC regulations and enforcement trends.

Europe’s Unified Approach Under MiCA

The European Union is establishing a coordinated approach to digital regulations through the Markets in Crypto-Assets (MiCA) directive. MiCA, implemented between 2024 and 2025, aims to provide regulatory clarity, investor protection, and financial stability while fostering innovation in crypto-assets.

MiCA introduces comprehensive regulations for crypto-assets. It covers Asset-Referenced Tokens (ARTs), E-Money Tokens (EMTs), and Utility Tokens. The regulation mandates registration for five categories of Crypto Asset Service Providers (CASPs), requiring them to comply with rules similar to those of traditional financial institutions regarding stability, custody, and market integrity.

While MiCA focuses on crypto-assets, tokens categorized as financial instruments are governed by existing laws such as  MiFID II. To accommodate security tokens, the EU introduced the DLT Pilot Regime in 2023, offering a regulatory sandbox for tokenized securities. 

The EU's unified regulatory framework across 27 countries aims to enhance legal clarity and investor trust in Real World Asset (RWA) tokenization.

Asia’s Sandbox Strategy for Tokenized Innovation

Many Asian financial hubs have clarified their securities regulations to accommodate digital finance innovations. 

The Monetary Authority of Singapore (MAS) regulates tokenized assets based on their nature: Tokens representing securities or investments are governed by the Securities and Futures Act. In contrast, payment tokens or digital currencies are subject to the Payment Services Act.

Digital tokens in Singapore that create capital market products such asshares, bonds, or funds must follow securities law. This regulatory clarity has attracted security token offerings to Singapore. 

Moreover, Singapore’s Project Guardian, first introduced in 2022 and expanded in 2024, is a regulatory initiative led by the Monetary Authority of Singapore (MAS) to explore decentralized finance (DeFi) applications in wholesale funding markets. It brings together brings major banks and fintech firms to test tokenized deposits and bonds within controlled DeFi ecosystems. The project aims to test how tokenized assets can operate under regulated conditions, clarifying liquidity, settlement, and infrastructure standards needed to integrate them into mainstream financial systems.

In Hong Kong, if a tokenized security is deemed a security under the Securities and Finance Ordinance (SFO), the Securities and Futures Commission (SFC) , will regulate it just like traditional security with a tokenization wrapper. Meanwhile, Hong Kong’s rules around security tokens and virtual assets often limit sales to professional investors. However, the new licensing regime, effective June 2023, allows retail trading certain virtual assets under strict conditions. 

In June 2023, Hong Kong also introduced a licensing system for virtual asset trading platforms, focusing on investor protection and compliance. In February of the same year, Hong Kong’s government issued a tokenized green bond, showing how tokenization can be a key part of its financial future.

Meanwhile, Japan’s updated Financial Instruments and Exchange Act classifies tokenized assets as "electronically recorded transferable rights," which must adhere to the same regulations as traditional securities. 

Japan saw strong growth in security token offerings through 2023, supported by regulatory clarity and institutional engagement. While issuance slowed in 2024, momentum is expected to recover as market conditions stabilize. The Japan STO Association and licensed exchanges collaborate with the Financial Services Agency (FSA) to maintain industry standards and facilitate trading. Japan's clear regulatory framework encourages institutional participation in asset tokenization.

How Middle Eastern and Latin American Markets Are Embracing Tokenized Assets

Several Middle Eastern countries are becoming crypto-friendly by establishing regulatory frameworks for digital assets. 

The UAE has led with Abu Dhabi’s financial free zone regulating virtual assets since 2018 and Dubai launching the Virtual Assets Regulatory Authority in 2022. 

Other Gulf states such as Bahrain have also licensed crypto firms, while Saudi Arabia is exploring tokenization through fintech sandboxes. The region focuses on investor protection, Sharia compliance, and attracting global crypto businesses.

Asset tokenization regulation in Latin America is still developing, with Brazil leading after passing a significant crypto law in December 2022. Brazil’s securities regulator and central bank are actively working on tokenized finance and stablecoin frameworks, with a view to introducing more straightforward during 2025. 

Other Latin American countries, such as Colombia, Chile, and Mexico, are also exploring crypto-asset legislation, while El Salvador shows interest in tokenizing financial instruments.

Cross-Border Collaboration: Next Step for Unified Digital Asset Standards?

Impact of Regulatory Fragmentation on Global Projects

Regulatory differences between jurisdictions impact global Real-World Asset tokenization projects. Many platforms need to adapt their approach to meet the requirements of each market. This can increase costs. Some projects exclude or limit access to investors from certain jurisdictions for regulatory reasons, which can lead to a fragmented investor base. 

Regulatory fragmentation shapes market dynamics.Tokenization activities often concentrate on jurisdictions considered “friendly” while others lag behind. For example, Singapore, Switzerland, and Dubai have all become hubs for tokenization activities. 

Tokenization projects that successfully navigate regulations across jurisdictions can set important examples and pressure other regulators to adjust. Over time, this may lead to closer global regulatory alignment. 

The Push Toward Global Regulatory Alignment

While regulatory frameworks for tokenized assets vary across jurisdictions, global standard-setters are working to establish common principles. The Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO) have issued recommendations for harmonizing crypto-asset regulations, particularly around AML, investor protection, and market integrity.

Meanwhile, the G20 has prioritized regulatory harmonization for digital assets to reduce cross-border inconsistencies that delay adoption. While perfect alignment may be unlikely, these initiatives show an increasing support for mutual recognition of tokenized asset frameworks. 

While regulatory fragmentation remains a challenge, early cooperation between global regulators suggests that gradual alignment may emerge in key financial hubs over the next decade.