Tokenising real-world assets (RWA)

The tokenisation of real-world assets — real estate, company shares, receivables, works of art, commodities — has moved in just a few years from promise to operational practice. The idea is simple: represent a right over an asset through a token on a distributed ledger, making it easier to transfer, fractionalise and administer. Switzerland is one of the few jurisdictions to have an explicit legal framework for doing so. But the hard part is not issuing the token: it is ensuring that the token genuinely corresponds to the right over the asset. Here is what matters.

What “tokenising” means

Tokenising does not create value out of nothing: it moves the representation of an already existing right onto a blockchain. The token can embody:

• a corporate right (shares or quotas, with the related voting and dividend rights);
• a receivable or debt instrument;
• a right in rem or contractual right over a physical asset (a fraction of a property, a unit in a fund, title to a commodity).

The central legal question is always the same: what does the holder of the token actually own? A token that “represents” a property without a solid legal anchor is merely a number on a chain. The value lies in the binding link between the token and the underlying right.

The Swiss framework: the ledger-based security

Since 2021 Swiss law has recognised the ledger-based security (register token, Art. 973d et seq. of the Code of Obligations). It is the instrument that allows a right to be validly embodied in a token and transferred through the distributed ledger, with the same legal effect as a traditional assignment. It requires a registration agreement between the parties and a ledger that guarantees integrity, transparency and control by the holders.

This is what makes Switzerland attractive: no contractual artifice is needed to simulate the transfer — the law directly recognises the effect of the token’s passage. But the regime applies only if the ledger and the documentation meet the prescribed requirements.

The most concrete use cases

Not everything is worth tokenising. The uses with real added value tend to share these features:

• Fractionalisation of high-unit-value assets (real estate, infrastructure), to open them up to investors with smaller tickets;
• Structural illiquidity that the token can ease (shares in unlisted companies, closed-end funds);
• Complex administration that can be simplified with programmable logic (distribution of proceeds, cap-table management).

Where the asset is already liquid and cheap to transfer, the benefit is often marginal compared with the added complexity.

Where the risks lie

Tokenisation touches several regulatory layers at once:

• Classification of the instrument: a token representing a share or a receivable may be a security, with implications for issuance, public offering and prospectus obligations.
• Anti-money laundering (AMLA): issuing, holding in custody and transferring on behalf of third parties may trigger regulatory subjection and the obligation to put safeguards and affiliation in place.
• Custody: whoever holds the keys effectively holds the asset. Custody liability is a topic of its own, to be defined precisely.
• Off-chain legal anchor: for physical assets, the underlying right lives in the real world (land register, contracts). The token must be anchored to that right so that the on-chain transfer also produces off-chain effects.

The correct sequence

A well-designed tokenisation project follows a precise order: first you define what you want to represent and in which legal form; then you classify the instrument from a regulatory standpoint; next you build the structure (issuing vehicle, registration agreement, custody, AML safeguards); only at the end do you issue. Starting from the technology, as often happens, is the fastest route to ending up with a token devoid of legal value or an activity that requires an authorisation never applied for.

How SIH ONE approaches the topic

SIH ONE handles structuring and advisory: classification of the asset and the instrument, design of the issuing vehicle, setting up the registration agreement and the AML safeguards, coordinating the link between token and underlying right. Where the operation requires activities subject to authorisation — third-party custody, intermediation, regulated services — those activities are handled by authorised partners. The goal is for the token to genuinely represent the right it promises.

This content is informational and does not constitute legal, tax or regulatory advice. Every project must be assessed on its specific facts.

Are you considering tokenising an asset and want to start from the right structure? Let’s talk: we define the legal perimeter and design the operation, with the right partners where authorisation is required.