TheMonsoon Ledger

State of Play

Regulated finance on public blockchains

Latest change ·

First version, covering India, Singapore and Hong Kong. Replaces the India-only entry on distributed ledgers.

Sources: mas.gov.sg, apps.sfc.hk, brdr.hkma.gov.hk, sebi.gov.in

Whether regulated institutions in India, Singapore and Hong Kong may issue, hold or settle assets on public permissionless blockchains, and under what controls

As of 30 September 2026, Singapore and Hong Kong allow regulated institutions to issue on public permissionless blockchains, and both attach the permission to controls in the token rather than trust in the chain: whitelisted holders, and issuer powers to freeze or correct. Singapore’s April 2026 capital proposal is the most explicit of the three. Hong Kong allows it through SFC tokenisation circulars and HKMA custody guidance, and its first licensed stablecoin runs on Ethereum. India’s regulated tokenisation runs on ledgers owned by market infrastructure institutions, and no Indian regulator has set out a path to public chains.

Side by side

India Singapore Hong Kong
Position Not used in regulated pilots Allowed, with issuer controls Allowed, with additional controls
Main instrument None MAS consultation on cryptoassets on permissionless blockchains (April 2026) SFC tokenisation circulars (2023, revised 2026); HKMA custody guidance (May 2026)
Controls named Not applicable Freeze and correct, whitelisted wallets, documented finality, smart contract audit Permissioned tokens given as the example; extra custody caution for permissionless tokens
Bank capital Basel standard not implemented Group 1 possible within caps Basel classification conditions apply
Live examples None UBS tokenised fund and DBS structured notes on Ethereum Anchorpoint’s HKDAP stablecoin on Ethereum

By market

India

India’s regulated tokenisation uses ledgers run by market institutions. The Demat 2.0 corporate bond pilot runs on a distributed ledger owned by the depositories and settles in the RBI’s wholesale CBDC. The RBI’s Unified Markets Interface is RBI infrastructure. No SEBI, RBI or IFSCA document sets out conditions under which a regulated entity could issue on a public chain.

Crypto assets on public chains are legal to hold and trade, and exchanges register with FIU-IND (Who can do what), but the RBI’s stated position is against private money on public infrastructure. Its December 2025 speech on stablecoins prefers CBDC and fast payment links.

Singapore

The Monetary Authority of Singapore (MAS) has used public chains in industry pilots since the first Project Guardian trade in 2022, which ran on a permissioned liquidity pool on Polygon. UBS Asset Management’s tokenised money market fund and DBS’s tokenised structured notes are issued on Ethereum mainnet and sold to accredited and institutional investors.

Bank capital was the obstacle, because the Basel standard puts tokens on permissionless chains in Group 2. MAS’s October 2025 response deferred the standard, citing layer 2 safeguards among the advances since it was written (para 2.5). Its April 2026 consultation then proposed Group 1 treatment for tokens on permissionless chains that meet principle-based requirements, with deeming provisions that include issuer freeze and correction powers, a documented point of finality, audited smart contracts and whitelisted wallets. The treatment applies now within caps.

Hong Kong

The SFC’s 2023 circular on tokenised securities distinguishes private, public permissioned and public permissionless networks, and warns of heightened cybersecurity risk for bearer tokens on public permissionless networks (para 10). The revised circular on tokenised authorised funds allows public permissionless networks only “with additional and proper controls”, giving a permissioned token as the example (para 13).

The HKMA’s custody guidance applies the same split to banks: permissioned tokens with smart contract access controls may allow recovery of lost assets, and banks should take extra caution before relaxing controls for permissionless tokens on public permissionless networks (paras 9 and 11). Anchorpoint’s licensed Hong Kong dollar stablecoin, HKDAP, is issued on Ethereum mainnet, with access limited to whitelisted wallets in its first phase.

For Ethereum

The pattern in both Singapore and Hong Kong is a permissioned token on a public chain: a token contract with a holder whitelist and issuer-controlled freeze and recovery functions. That makes Ethereum a venue for regulated issuance while keeping the controls regulators expect. It also means these tokens do not move freely through DeFi or into self-custody. Ether and other tokens with no issuer do not qualify for the lighter treatment in either market.

Open questions

  • Whether any Indian regulator addresses public chains for tokenised assets, and in which document.
  • Whether Singapore’s final capital rules keep the 2% of Tier 1 cap, which limits bank issuance on public chains to pilot scale.
  • Whether Hong Kong regulators accept any control other than a permissioned token as sufficient for public-chain issuance.
  • Whether the Basel Committee’s targeted review of the cryptoasset standard changes the default for permissionless chains.

Next milestones

  • Pending: MAS response to its April 2026 consultation.
  • Later in 2026: Basel Committee update on the targeted review.
  • End of 2026: Anchorpoint’s target for retail access to HKDAP.

Regulatory Wire items on this topic

Hong Kong · HKMA · Circular

HKMA updates custody standards for banks holding digital assets for clients

Final · Applies to Banks

The HKMA updated its expected standards for banks and their subsidiaries that hold digital assets for clients, covering crypto, tokenised securities and other tokenised assets. The guidance sets out governance, segregation, key management, cold wallet controls, monitoring and staking requirements. It asks banks to apply extra caution to permissionless tokens on public permissionless networks.

Why it matters: The HKMA's custody guidance now names public permissionless chains as a distinct, higher risk, which will shape how banks price and structure custody on them.

For Ethereum: Banks must treat permissionless tokens on public permissionless networks as higher risk, and the guidance says permissioned tokens may allow recovery of lost assets.

Source: HKMA · Archived copy

Updates: Regulated finance on public blockchains

Hong Kong · SFC · Circular

SFC allows retail secondary trading of tokenised SFC-authorised funds on licensed platforms

Final · Applies to Fund managers, VASPs, Brokers, Retail

The SFC set requirements for trading tokenised SFC-authorised investment products on licensed virtual asset trading platforms, including by retail investors. It revised its 2023 tokenisation circular at the same time. The rules are written mainly for open-ended funds and cover fair pricing, market making, disclosure and the link between primary dealing and on-platform trading.

Why it matters: Tokenised funds in Hong Kong now have a trading venue, which is the missing piece that kept them a subscription-and-redemption product.

For Ethereum: Tokenised funds may still only use a public permissionless chain with extra controls, such as a permissioned token.

Source: SFC · Archived copy

Updates: Regulated finance on public blockchains

Singapore · MAS · Consultation

MAS proposes Group 1 capital treatment for tokens on permissionless blockchains

Proposal · Comments close · Effective · Applies to Banks

MAS proposes that banks may treat cryptoassets on permissionless blockchains as Group 1, the lower-capital category, if they meet principle-based requirements on governance, technology, settlement finality and AML. Deeming provisions give a safe harbour, including issuer powers to freeze or correct transactions and whitelisting of holders. The treatment is available from publication, subject to exposure and issuance caps, while MAS consults.

Why it matters: MAS is breaking from the Basel default that a permissionless chain means Group 2 capital, and banks can use the new treatment now.

For Ethereum: Tokenised deposits, bonds or stablecoins issued by a bank on Ethereum or an Ethereum L2 can qualify for Group 1 if the issuer keeps freeze, correction and whitelisting controls.

Source: MAS · Archived copy

Updates: Regulated finance on public blockchains