The digital age continues to revolutionise traditional sectors, with real-world asset (RWA) tokenisation emerging as a groundbreaking concept, writes Wylie Schnorr of Bull Blockchain Law LLP in a thought leadership piece for Cointelegraph.
RWA tokenisation has presented itself as an opportunity for much greater investment accessibility and operational efficiency than traditional securitisation processes. Across the world, RWA tokenisation depends heavily on navigating complex legal and regulatory landscapes, particularly in the United States.
Real-world asset tokenisation involves representing physical assets like real estate, commodities, or financial instruments as digital tokens on a blockchain. These tokens function as digital proof of ownership, enabling fractional ownership, streamlined transactions, and enhanced liquidity. The tokenisation of US Treasurys, real estate, and even air rights showcases the growing interest in this sector, with the market exceeding $12 billion in 2024.
Although there have been ongoing discussions over the uncertainty of laws and regulations surrounding non-security crypto assets, the regulatory and legal environment for security tokens is much clearer, particularly in the United States. Regulatory bodies such as the US Securities and Exchange Commission (SEC) have tended to approach novel crypto assets with securities-like features primarily by applying existing securities laws practices. For instance, tokenised offerings typically require registration or exemptions, and issuers must adhere to restrictions such as resale limitations under Rule 144 of the Securities Act of 1933.
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