Digital law

What is asset tokenization?

Tokenization consists of dividing the ownership or enjoyment of an asset into digital units, the tokens, which can be acquired, transferred or traded on dedicated platforms.

In the real estate sector, tokenization allows several investors to hold an indirect fraction of a property without acquiring traditional full ownership, with potentially greater liquidity than a conventional investment.

Legal and regulatory challenges

Tokenization does not escape the rules of securities law, property law and financial regulation. Several fundamental questions must be anticipated:

• Legal classification of the token: depending on its characteristics, a token may qualify as a financial instrument, a savings bond, a transferable security or a sui generis digital asset. This classification entirely determines the applicable regulatory regime.
• Compliance with the MiCA regulation: the issuance and trading of tokens are now regulated at European level. Issuers must comply with documentation and disclosure obligations and, depending on the token category, capital requirements.
• Tokenization of receivables: the assignment of tokenized receivables raises specific questions of enforceability against third parties. It is one of the most mature and most active use cases in practice.
• AML/CFT obligations: platforms involved in tokenization are subject to anti-money laundering and counter-terrorist financing rules, which requires appropriate due diligence procedures.
• Ownership rights and enforceable title: the tokenization of a real estate asset or a receivable produces legal effects only if the transfer conditions laid down by civil law are met. The token does not automatically transfer ownership. Recording a financial security in a DLT-based securities register (DEEP, the French shared electronic recording system) is not the same as transferring ownership of the underlying asset: for tokenized real estate, receivables or company shares, the interplay with civil law transfer rules remains an exercise in contractual engineering on which our firm is regularly retained.
• Taxation of tokens: gains realised on the disposal of crypto-assets are taxable. The tax treatment varies with the token's classification and the seller's status (individual or professional) and must be anticipated from the structuring phase.

The lawyer's role in a tokenization project

MOSAIK acts at every stage of a tokenization project:

• Prior legal audit: analysis of the tokens' classification, the applicable regulatory constraints and the identified risks;
• Structuring the project: choice of legal form, drafting of contractual documents (terms of issuance, investor agreements, governance rules);
• Obtaining the necessary authorisations: assistance with filings before the AMF (French financial markets authority) or the Banque de France depending on the activities carried out;
• Drafting disclosure documents: white paper, information notice or prospectus depending on the applicable regime;
• Tax advice: tax-efficient structuring of the issuance and related flows;
• Dispute management: defending the interests of issuers or investors in the event of litigation.

Beyond the standard audit, structuring and drafting services that any firm offers, MOSAIK's distinctive contribution lies in bridging French tokenization law with the foreign regimes most used by issuers (Switzerland: the DLT Act; Liechtenstein: the TVTG; Singapore: the Payment Services Act; Delaware: the DGCL post-2017). Our Hong Kong office, in Asia's second-largest regulated crypto hub, also gives us direct access to the regime of the Securities and Futures Commission (SFC) and the VATP framework, a natural complement to the MiCA / PSCA toolkit for transcontinental projects.

Our preferred tokenization sectors

MOSAIK handles its tokenization matters across five sectors where the team's first-hand experience informs the legal analysis:

• Public sector and impact finance: tokenization of tax receivables, regulatory compliance frameworks and carbon finance instruments, for governments, international organisations and impact operators;

• Shipping and port operations: tokenization of bills of lading (eBL), trade finance and port concessions;

• Real estate and major infrastructure projects: structuring of real estate tokenization vehicles and tokenized project finance;

• Asset management and international investments: tokenization of fund units, secondary markets for private holdings, ART/EMT stablecoins;

• Emerging technologies and creative industries: NFTs, music catalogues and neighbouring rights, metaverse economies.

Frequently asked questions

How do you legally structure a real estate tokenization project in France?

Directly tokenizing a building runs up against the requirements of the notarial deed and land registration. The usual route is to interpose a special-purpose vehicle (SCI, SCCV, OFS or a foreign vehicle depending on the profile) whose shares or bonds are themselves tokenized. The choice of vehicle determines the MiCA classification, the investors' tax regime and the token's liquidity arrangements. Our partner IB contributes precisely to the European Law Institute's work on these questions.

Can fund units (FCPR, FCP, SCPI) be tokenized?

Yes, subject to the framework applicable to the vehicle (AMF, AIFM, UCITS) and the nature of the token issued. Several structures are possible: native issuance on a DLT-based securities register (DEEP under French law), a depositary receipt, or a backed second-layer token. Each has distinct consequences in terms of prospectus requirements, cross-border marketing and taxation of disposals. An upfront analysis is essential.