USA vs Switzerland vs Singapore — 2025 RWA Regulation Guide

The choice of legal jurisdiction is one of the most critical strategic decisions for any RWA issuer. This decision shapes everything from regulatory compliance costs and time to market to investor access and secondary market liquidity. Three jurisdictions have emerged as the leading hubs for tokenized securities: the United States, Switzerland, and Singapore.

Each jurisdiction offers distinct advantages and challenges. The USA provides access to the world's deepest capital markets but requires navigation through complex, decades-old securities laws. Switzerland offers purpose-built DLT legislation with exceptional legal clarity. Singapore presents a balanced, innovation-friendly environment with strong connections to Asian markets. Understanding these differences is essential for making an informed jurisdictional choice.

This comparative analysis examines how each jurisdiction approaches RWA regulation, from initial issuance requirements through secondary market trading. We'll explore the practical implications of each regulatory framework, helping issuers and funds understand which jurisdiction best aligns with their strategic objectives.

Framework Overview

Understanding how each jurisdiction conceptualizes and regulates tokenized securities provides the foundation for strategic decision-making. These three approaches represent fundamentally different regulatory philosophies, each shaped by the jurisdiction's financial history, market structure, and policy objectives.

USA: Adapting Existing Securities Law

The United States applies its established securities regulatory framework—primarily the Securities Act of 1933 and Securities Exchange Act of 1934—to digital assets, treating tokenized securities as traditional securities that utilize blockchain technology. The Securities and Exchange Commission (SEC) determines what constitutes a security through the Howey Test and has taken an enforcement-led approach, using regulatory actions and guidance documents rather than creating new legislation. This means tokenized securities must comply with the same registration, disclosure, and reporting requirements as traditional securities unless they qualify for specific exemptions. The framework emphasizes investor protection through mandatory disclosures, anti-fraud provisions, and strict liability for material misstatements, with different rules applying based on investor type (accredited vs. retail), offering size, and distribution method. While this approach provides regulatory certainty around core principles and access to the world's deepest capital markets, the challenge is that these decades-old rules weren't designed for programmable, globally transferable digital assets.

Switzerland: Purpose-Built DLT Legislation

Switzerland took a proactive approach by enacting the DLT Act in 2021, creating a comprehensive legal framework specifically designed for digital securities. This legislation introduced new legal categories, including DLT securities that can be issued and transferred entirely on blockchain infrastructure without traditional intermediaries. Switzerland recognizes ledger-based securities under Swiss Code of Obligations Art. 973d et seq., providing a clear statutory basis for tokenized assets.

The Swiss Financial Market Supervisory Authority (FINMA) provides clear guidance and licensing categories for digital asset businesses. The framework includes specific provisions for DLT Trading Facilities, which can operate as regulated venues for trading tokenized securities. BX Digital received the first DLT Trading Facility license in 2025, marking a milestone for institutional adoption^[18]. This purpose-built approach provides exceptional legal clarity, reducing regulatory uncertainty for issuers and investors.

Switzerland's framework balances innovation with investor protection, allowing for more flexibility in how tokenized securities are structured and traded while maintaining robust oversight. The country's political stability, strong privacy laws, and favorable tax treatment for certain digital assets have made it attractive for blockchain projects. The challenge is that the Swiss market is smaller than the US, potentially limiting access to capital for larger offerings.

Singapore: A Principles-Based Sandbox Approach

The Monetary Authority of Singapore (MAS) has adopted a principles-based regulatory approach that emphasizes innovation through controlled experimentation. Rather than prescriptive rules, MAS provides broad principles and works directly with industry participants to develop appropriate regulatory frameworks for new technologies.

Singapore's approach is exemplified by Project Guardian, a collaborative initiative between MAS and major financial institutions to explore tokenized asset use cases. The Sandbox Plus framework (effective 2022) allows firms to test innovative products and services with real customers under relaxed regulatory requirements, provided they meet certain safeguards. Successful experiments can then graduate to full regulatory approval with frameworks tailored to their specific characteristics.

The Payment Services Act and Securities and Futures Act provide the regulatory foundation, with MAS issuing detailed guidance on how these laws apply to digital assets. Singapore's framework is particularly strong on anti-money laundering and counter-terrorism financing requirements, reflecting the country's role as a global financial hub. The jurisdiction offers a balanced approach that encourages innovation while maintaining market integrity, with strong connections to both Western and Asian markets.

Issuance & Licensing

The process of launching a security token varies significantly across jurisdictions. We compare three key levers: exemptions versus full registration, venue licensing requirements, and ongoing reporting obligations.

In the United States, tokenized securities must either be registered with the SEC or qualify for an exemption. The most commonly used exemptions include Regulation D (private placements to accredited investors), Regulation S (offerings to non-US persons), and Regulation A+ (mini-IPOs allowing some retail participation) ^[1]. Each exemption has specific requirements and limitations on who can invest, how securities can be marketed, and when they can be resold. The registration process can take months and cost millions of dollars, while exemptions offer faster, cheaper alternatives but with restricted investor pools. Issuers sometimes pair U.S. exemptions with Regulation S offshore offerings, though they must avoid directed selling efforts into the U.S. and carefully manage integration risk.

For Regulation D offerings, issuers must file initial Form D within 15 days of first sale, file annual amendments only if the offering remains open beyond 12 months, and file amendments for material changes. While Rule 506 offerings preempt state registration, most states require notice filings and fees.

Switzerland requires issuers to obtain appropriate licenses from FINMA based on the nature of their activities. Securities dealers need authorization if they publicly offer tokenized securities or create a secondary market. The prospectus requirements apply to public offerings unless specific exemptions are met. However, the DLT Act provides streamlined processes for purely digital securities, allowing them to be issued and transferred without traditional intermediaries ^[2]. The licensing process is generally faster than in the US, with FINMA providing clear timelines and requirements.

Singapore's licensing requirements under the Securities and Futures Act depend on the specific activities undertaken. Firms dealing in capital markets products, including tokenized securities, typically need a Capital Markets Services (CMS) license ^[3]. MAS has introduced the Sandbox Plus framework (from 2022) for digital asset activities, allowing faster market entry with appropriate safeguards. The licensing process emphasizes risk management and operational readiness rather than prescriptive compliance requirements.

For issuers comparing these jurisdictions, key considerations include the target investor base, desired speed to market, and long-term operational requirements. The US offers the largest investor pool but highest compliance burden, Switzerland provides the clearest regulatory framework, and Singapore offers the most flexibility for innovation. Many issuers utilize multiple jurisdictions, structuring offerings to leverage each market's advantages while managing regulatory complexity. Understanding these foundational concepts is essential for navigating RWA regulation and compliance requirements across different markets.

Secondary Market Rules

Post-issuance trading regulations significantly impact the liquidity and value proposition of tokenized securities. The United States imposes the following key requirements:

• ATS/Broker-Dealer Requirements: Trading generally occurs on Alternative Trading Systems (ATSs) operated by registered broker-dealers that are FINRA members, subject to SEC and FINRA oversight ^[4][5]
• Rule 144 Holding Periods: Restricted securities have holding periods of 6 months (SEC-reporting issuers) or 1 year (non-reporting issuers) under Rule 144 ^[4]
• Token-Level Enforcement: Transfer restrictions must be enforced through smart contracts or transfer agent controls, adding technical complexity to token design

Switzerland's approach to secondary markets reflects its purpose-built framework for digital assets. The DLT Act created a specific license category for DLT Trading Facilities, which can admit retail and institutional participants. These facilities operate similarly to traditional exchanges but are designed specifically for blockchain-based assets. The requirements are proportionate to the risks involved, with lighter requirements for facilities serving only professional investors.

Swiss regulations allow for more flexible transfer mechanisms, recognizing that blockchain enables peer-to-peer transfers without traditional intermediaries. However, anti-money laundering requirements still apply, and trading facilities must implement appropriate know-your-customer procedures. The framework supports both centralized and decentralized trading models, provided they meet regulatory requirements.

Singapore requires platforms facilitating tokenized securities trading to obtain recognition as a Recognized Market Operator (RMO) or Approved Exchange (AE) status, along with relevant CMS licenses ^[7]. The MAS has shown openness to innovative market structures, including automated market makers and decentralized trading protocols, provided they meet regulatory objectives around market fairness and investor protection. For example, DigiFT operates with RMO and CMS licenses while utilizing AMM mechanisms^[13].

The Singapore framework emphasizes technology neutrality, focusing on activities and risks rather than specific technologies. This allows for greater innovation in how secondary markets operate while maintaining regulatory oversight. MAS has also been exploring cross-border connectivity, working with other regulators to enable efficient trading of tokenized securities across jurisdictions.

Tax & Reporting

Tax treatment and ongoing reporting obligations represent critical operational considerations for tokenized securities across all three jurisdictions. While this analysis provides a high-level comparison, specific tax implications vary based on structure, investor type, and other factors.

In the United States, tokenized securities are generally treated as capital assets for tax purposes, similar to traditional securities. Long-term capital gains rates apply to tokens held for more than one year, while short-term gains are taxed as ordinary income (see IRS Publication 550 and Topic 409 for capital asset rules). The IRS requires detailed reporting of all transactions, including cost basis tracking and gain/loss calculations. Issuers must provide appropriate tax forms (such as 1099s) to investors and may have withholding obligations for certain types of payments.

Ongoing reporting requirements depend on the exemption used for issuance. Securities sold under Regulation D require initial Form D filing within 15 days of first sale, annual amendments if the offering remains open beyond 12 months, and amendments for material changes. Regulation A+ offerings require annual, semi-annual, and current reports similar to public companies but with reduced disclosure requirements. These reporting obligations create ongoing compliance costs that must be factored into the economic model.

Switzerland generally treats tokenized securities as movable assets subject to wealth tax. Importantly, private capital gains on movable assets are generally tax-free for Swiss residents, though wealth tax applies. Corporate investors face different treatment, with gains generally taxable as business income. The Swiss withholding tax of 35% applies to certain distributions, though tax treaties may reduce this rate for foreign investors.

Swiss reporting requirements are generally lighter than in the US, particularly for private placements. However, issuers must maintain accurate records and may need to report certain information to tax authorities. The country's favorable tax treaties and stable tax regime make it attractive for international structures, though complexity increases for cross-border offerings.

Singapore does not impose capital gains tax, making it potentially attractive for investors. However, gains may be taxable as income if they arise from trading activities rather than investment holding (the Inland Revenue Authority of Singapore applies a facts-and-circumstances test). The absence of capital gains tax simplifies compliance but requires careful structuring to ensure gains qualify for this treatment.

Reporting requirements in Singapore focus on anti-money laundering and regulatory compliance rather than extensive financial disclosures. Issuers must maintain proper books and records and may need to file periodic reports with MAS depending on their license type. The reporting burden is generally considered moderate, balancing regulatory oversight with operational efficiency.

Practical Decision Matrix

Choosing the optimal jurisdiction for tokenized securities requires evaluating multiple factors against specific business objectives. The following decision matrix provides a framework for comparing key considerations across the three jurisdictions.

Considerations for Global Investors

Regardless of where a token is issued, an investor's ability to participate is fundamentally governed by the laws in their own country of residence. For example, a Swiss-issued token marketed to U.S. persons can still trigger U.S. securities requirements, requiring compliance with SEC regulations. Similarly, a Singapore-based token must meet European regulations if marketed to EU residents. This creates a complex web of cross-border compliance requirements that issuers must navigate carefully.

Tax treaties play a crucial role in determining the effective tax burden for cross-border investments. The extensive treaty networks of all three jurisdictions can significantly reduce withholding taxes and prevent double taxation, but only if properly structured. Investors must consider not just the issuing jurisdiction's tax treatment but also how their home country will tax the investment, including any foreign tax credits or exemptions available.

Cross-border compliance extends beyond initial investment to ongoing operations. Transfer restrictions, reporting requirements, and regulatory notifications may apply when tokens move between jurisdictions. Smart contract implementations must be sophisticated enough to enforce these requirements while maintaining operational efficiency. Many successful tokenized securities implement geofencing and investor whitelisting to manage these complexities.

For institutional investors, the regulatory status of the issuing jurisdiction affects their ability to hold tokenized securities. Pension funds, insurance companies, and other regulated entities often have restrictions on investing in certain jurisdictions or require specific regulatory frameworks to be in place. The perceived regulatory quality of the issuing jurisdiction can therefore significantly impact the available investor pool. Understanding these dynamics is essential for successful investing in RWAs across global markets.

The "best" jurisdiction is ultimately a strategic choice that depends on specific business objectives and constraints. The USA offers unparalleled access to capital but requires navigating complex regulations and high compliance costs. Switzerland provides exceptional legal clarity and a favorable tax environment within a smaller but sophisticated market. Singapore presents a balanced, innovation-friendly hub with strong government support and strategic positioning between Eastern and Western markets.

Many successful projects utilize a multi-jurisdictional approach, issuing different token classes in different markets or establishing subsidiary structures to access multiple investor pools. This complexity requires careful planning and significant legal resources but can optimize access to global capital while managing regulatory risk. As the regulatory landscape continues to evolve, maintaining flexibility to adapt structures and jurisdictions will remain crucial for long-term success.

References

[1] SEC Division of Corporation Finance: Small Business Capital Raising Exemptions (as of August 23, 2025)

[2] FINMA DLT Trading Facilities: DLT Trading Facility Licensing (as of August 23, 2025)

[3] MAS Capital Markets Services: CMS Licensing Requirements (as of August 23, 2025)

[4] SEC Rule 144: Holding Period and Other Requirements (as of August 23, 2025)

[5] FINRA ATS Requirements: Alternative Trading System Regulation (as of August 23, 2025)

[6] Swiss Code of Obligations: Art. 973d et seq. - Ledger-Based Securities (as of August 23, 2025)

[7] MAS Recognized Market Operators: RMO and AE Framework (as of August 23, 2025)

[8] IRS Publication 550: Investment Income and Expenses (as of August 23, 2025)

[9] SEC Form D: Notice of Exempt Offering Requirements (as of August 23, 2025)

[10] MAS Sandbox Plus: Enhanced FinTech Regulatory Sandbox (as of August 23, 2025)

[11] SEC Regulation S: Offshore Offering Safe Harbor (as of August 23, 2025)

[12] IRAS Tax Treatment: Digital Token Taxation in Singapore (as of August 23, 2025)

[13] DigiFT RMO License: DigiFT Regulatory Approvals (as of August 23, 2025)

[14] BlackRock BUIDL Fund: BUIDL Fund Information (as of August 23, 2025)

[15] Franklin Templeton FOBXX: Franklin OnChain Fund Details (as of August 23, 2025)

[16] SEC Regulation ATS: Alternative Trading System Filings (as of August 23, 2025)

[17] State Notice Filing Requirements: NASAA Coordinated Review (as of August 23, 2025)

[18] BX Digital DLT License: FINMA Approves First DLT Trading Facility (as of August 23, 2025)

This content is for educational purposes only and does not constitute financial, legal, or tax advice.