CAYMAN ISLANDS Law and Practice Contributed by: Peter Colegate, Marsha Williamson and Dean Bennett, Appleby
Tokenisation of Other Real-World Assets For tokenised assets outside of the funds context – trade receivables, real estate, commodities, carbon credits, infrastructure assets, and other financial instruments – the applicable Cayman legal framework depends on the nature of the underlying asset and the rights represented by the token. Where the token represents an ownership or beneficial interest in an underlying asset, the key legal engineering challenge is ensuring that the on-chain token faithfully reflects an enforceable off-chain legal interest, and that trans- fer of the token effects or is accompanied by transfer of that underlying interest. The UK 2025 Act is directly relevant: the recognition of digital assets as property means that the token itself can constitute a proprietary interest, rather than merely being a contractual record of an off-chain interest. This opens analytical possibili- ties that were not available under the pre-2025 legal framework. Legal due diligence on tokenised asset transactions should assess: • the characterisation of the token under Cayman and applicable foreign law; • whether the token constitutes a security under SIBA; • whether the issuer requires VASP registration; • the mechanics of transfer and whether transfer of the token transfers the underlying asset interest; • the insolvency analysis (is the token holder’s inter- est protected against the insolvency of the issuer or custodian); and • the AML/CFT and CARF compliance architecture.
volume retail or institutional payment flows, demands robust technology infrastructure and interoperability with counterpart VASPs. CARF and Stablecoin Operators CARF compliance is an immediate and material obli- gation for stablecoin operators. The Tax Information Authority (International Tax Compliance) (Crypto-Asset Reporting Framework) Regulations, 2025, define “Cayman Reporting Crypto-Asset Service Provid- ers” broadly, and a stablecoin operator that provides exchange services (fiat-to-stablecoin or stablecoin- to-stablecoin), transfer services, or custody services to identifiable users will typically fall within the defini- tion. 7. Tokenisation and Real-World Assets 7.1 Treatment The Tokenisation Opportunity The tokenisation of real-world assets – securities, fund interests, real estate, commodities and other financial and non-financial assets – is the area of the digital asset market generating the most sustained institu- tional interest currently, and the Cayman Islands is well positioned to serve as a structuring jurisdiction for such transactions. The combination of a mature and flexible corporate and funds law framework, the new Tokenised Funds Framework, the clarity now provided by the UK 2025 Act on digital assets as property, and a sophisticated professional services ecosystem cre- ates a genuine competitive advantage.
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