The Bermuda Monetary Authority is planning to streamline its regulatory framework for tokenised assets after the industry warned that overlapping rules could slow growth.

In feedback on the authority’s November discussion paper, respondents across the digital asset, insurance and legal sectors said they were concerned about duplication in licensing requirements, particularly where tokenised products fall under more than one regime.

“All respondents recommended streamlining the licensing and supervisory processes to avoid inefficiencies that could arise from dual licensing obligations,” the BMA said in a summary of submissions.

The feedback points to a central tension as Bermuda tries to position itself as a hub for tokenisation: balancing innovation with regulatory clarity while avoiding too much complexity.

The BMA signalled it is considering an integrated exemption framework to address the issue. This would potentially allow firms to operate under a single regime depending on their business model. The Authority is also reviewing how tokenised investments are classified across the legislation the island already has.

At the same time, the authority said its current framework already provides a strong foundation for the sector.

“The definition of ‘digital asset’ under DABA is sufficiently broad to encompass various token types and already provides a comprehensive regulatory framework for the tokenisation of any type of asset,” the BMA said.

Industry feedback also pointed to growing interest in tokenised financial products, including equity, fund structures and early-stage reinsurance applications, although the BMA did not see much demand for insurance-linked securities in tokenised form.

However, stakeholders warned that legal and legislative gaps — particularly around company law, property rights and the recognition of digital registers — could limit adoption of the tokens without even more reform.

The BMA said it would issue a consultation paper in April setting out more detailed proposals, in hopes of refining its approach.

At Davos earlier this year, David Burt, the Premier and Minister of Finance, unveiled a plan to put Bermuda’s economy fully on-chain, with tokenised payments integrated into both the public and private sector, though it has come with pushback.

Last year, Xin Yan, chief executive of Sign Global, which is working with the Government of Barbados on a blockchain plan of its own, told The Royal Gazette that Bermuda could go even further and convert a wide range of assets into digital form, building a new layer of national infrastructure.

He added that for smaller economies without commodities such as oil or minerals, tokenised financial instruments could play that role instead.