Amid the global wave of tokenization, the Monetary Authority of Singapore (MAS) officially launched the "Guide to Tokenization of Capital Markets Products" on November 14, 2025, marking a new phase of systematization and refinement in the country's digital asset regulatory framework. This document represents a comprehensive upgrade from the 2017 "Guide to Digital Token Offerings," aiming to adapt to the development trend of tokenization activities expanding from the issuance end to the entire chain including trading, custody, and settlement. It demonstrates Singapore's consistent regulatory philosophy of "technology neutrality" and "substance over form," providing the most detailed institutional framework to date for the tokenization of global capital markets.
From "digital tokens" to "tokenized capital markets products," Singapore's regulatory scope has achieved significant expansion. The new guide states that tokenization refers to the use of software programs to create digital tokens representing capital markets products, typically deployed on programmable platforms such as distributed ledger technology (DLT) to facilitate the recording and transfer of ownership. This technological combination brings opportunities to enhance transaction efficiency and increase financial inclusion, but also introduces uncertainties in the application of securities laws and technology-specific risks. Therefore, the new guide explicitly states that securities laws and other relevant legislation apply to the issuance, offering, and related entity activities of tokenized CMPs.
The core of the new regulations lies in implementing the principle of "same activity, same risk, same regulatory outcome." MAS emphasizes that there is no difference in economic substance between tokenized and non-tokenized CMPs; the distinction lies only in their form. Consequently, regulation should focus on the economic substance of the digital token, not its technological form. To enhance practicality, the guide's appendix uses 17 typical cases to explain in detail under what circumstances digital tokens constitute CMPs such as shares, bonds, and units in collective investment schemes. It deliberately avoids using labels like "utility tokens" or "security tokens" to prevent regulatory arbitrage arising from classification.
Regarding compliance pathways, the new regulations require that public offerings of tokenized CMPs constituting securities, securities derivatives, or CIS units must comply with the relevant provisions of the Securities and Futures Act, including preparing and registering a prospectus. It also clarifies exemptions such as small offerings, private placements, and offerings solely to institutional investors. Regarding disclosure, it particularly emphasizes the disclosure of "tokenization-specific risks," requiring coverage of the underlying DLT technology type, smart contract governance, rights and obligations, custody arrangements, and various risk disclosures.
For intermediaries, the new regulations clarify the various licenses potentially required for activities related to tokenized CMPs, including Capital Markets Services licenses and Financial Adviser licenses, and emphasize the fulfillment of anti-money laundering and counter-terrorism financing obligations. Regarding cross-border application, the guide clarifies that the Securities and Futures Act may still have extraterritorial effect as long as there is a "substantial and reasonably foreseeable effect" on Singapore. It also continues to provide testing space for innovation through the "FinTech Regulatory Sandbox."
Compared to the US "Howey Test" and Hong Kong's existing virtual asset regulatory framework, Singapore's new regulations demonstrate a more systematic analytical framework and greater operational practicality. Although Hong Kong has gradually built a virtual asset regulatory system since 2018 and introduced tokenized securities and related sandbox mechanisms between 2023 and 2025, there is still room for improvement in terms of the breadth of coverage, the detail of case guidance, and the completeness of full-chain supervision.
The issuance of Singapore's new regulations provides the industry with clear compliance navigation, effectively reducing regulatory uncertainty, while preventing regulatory arbitrage through the "substance over form" principle, reflecting regulatory wisdom that balances encouraging innovation with risk prevention and control. This move undoubtedly creates policy competition pressure for Hong Kong. If Hong Kong wishes to consolidate its position as a global FinTech hub, it urgently needs to introduce a comprehensive framework covering a wider range of CMP categories to maintain competitiveness in the future financial battleground of tokenization. The new regulations have stirred the waters of Hong Kong, and the Asia-Pacific financial landscape may usher in a new round of adjustments.
