The concept of tokenization of real-world assets is here to stay and likely to become an integral part of global financial systems in the coming years.
The financial world is undergoing a quiet but radical transformation in 2025. Sovereign bonds are being settled in seconds instead of days. Private credit, once locked in illiquid structures, are becoming programmable and tradeable. Carbon credits are being issued as traceable digital assets, reducing greenwashing and boosting integrity. Money market funds and ETFs are evolving into always-on, tokenized products, collateralised and being cleared in real time.
From programmable treasury products to tokenized VC funds and digitally native impact projects, we're entering a new paradigm — one that re-writes the rules of ownership, liquidity, and capital formation. This is not just innovation for the purpose of innovation, but rather it's a re-architecture of the financial system with serious legal and regulatory implications.
In this article, KGP Legal explores the key global trends driving tokenization in 2025 on where they're gaining traction, what legal frameworks are emerging to support them, and how forward-thinking businesses can get ahead.
Whether you are a fintech innovator, asset manager, family office, or regulatory authority, this is your essential guide to navigating and capitalising on the tokenized future.
Singapore is not just reacting to this shift, but it's helping define it. As one of the world's most progressive regulatory and financial hubs, Singapore offers a uniquely fertile ground for tokenization to scale safely and strategically.
At KGP Legal, we're here to help you stay compliant, mitigate risks, and unlock the full potential of digital asset transformation.
Introduction
Tokenization is revolutionising how real-world assets are owned, transferred, and traded across the globe. By representing both physical and financial assets as digital tokens on secure distributed ledgers, tokenization is enhancing liquidity, reducing settlement times, and democratising access to investment opportunities.
The acceleration of tokenization is no longer a speculative trend, but a strategic shift in capital markets infrastructure one that is fundamentally changing the way we think about ownership, liquidity and value exchange. This article highlights the key global trends shaping tokenization in 2025—spanning carbon products, treasury instruments, private credit, and impact projects while also discussing the emerging legal frameworks designed to support these developments.
- Tokenization of Carbon Products
The global carbon market is evolving quickly, driven by an increased demand for high-integrity, verifiable carbon offsets. Tokenizing carbon credits not only enhances traceability and reduces the risk of double counting, but it also opens the market to broader market participation, enabling smaller entities to play a more prominent role in carbon offsetting.
Legal framework:
Carbon credits must be tied to verifiable emissions-reduction projects and comply with global standards such as the Paris Agreement's Article 6 mechanisms. Tokens need to represent true ownership, with robust auditability and retirement protocols in place.
How lawyers can assist:
- Structuring carbon credit purchase and retirement contracts
- Ensuring regulatory alignment with both voluntary and compliance carbon markets
- Navigating complex cross-border legal risks tied to carbon offset transactions
- Tokenization of the Treasury Space
- Tokenization of VC Funds
- Tokenization of Liquidity in Trade Finance
- Tokenization of Money Market Funds and ETFs (Collateralisation and Trading Facilities)
- Tokenization of Private Credit
- Tokenization of Treasury Bonds
- Tokenization of Impact Projects
How This Will Affect Singapore
As a leading financial hub, Singapore is uniquely positioned to benefit from — and influence — the global trends of tokenization. With a progressive regulatory environment, the city-state is poised to foster the rapid growth of tokenization across sectors such as carbon credits, trade finance and investment funds.
The Monetary Authority of Singapore's (MAS) is actively driving innovation in tokenization through initiatives likeProject Guardian, which is focused on piloting asset tokenization and decentralised finance (DeFi) applications within wholesale funding markets. This positions Singapore at the forefront of tokenization, both regionally and globally.
Singapore's robust legal infrastructure — including clear frameworks under thePayment Services Act 2019,Securities and Futures Act 2001, and support for electronic transferable records — provides a strong foundation for tokenization projects.
Looking ahead, tokenization is expected to significantly enhance the efficiency, accessibility, and transparency of Singapore's financial markets, while also creating new opportunities for investors, issuers, and service providers. Businesses must carefully navigate regulatory requirements, technology risks, and governance challenges to fully leverage these emerging opportunities.
At KGP Legal, we are committed to guiding our clients through the complexities of tokenization, helping them to structure, launch and scale their tokenization initiatives. Our panel of lawyers is well-versed in the evolving regulatory landscape and is ready to support you in capturing the benefits of this new digital frontier.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
