RWA Project Landing Overseas: Analysis of Issuance Coin Entity Selection

With the continuous improvement of the RWA regulatory framework, more and more RWA projects are starting to land overseas. The core of RWA projects is to tokenize real-world assets. When it comes to token issuance, due to strict compliance requirements in various countries, project parties must prioritize compliance. The choice of the issuing entity is a fundamental but crucial part of compliance in token issuance.

In recent years, Singapore has gradually become a "crypto paradise" favored by entrepreneurs and investors in the cryptocurrency industry due to its open regulatory attitude and sound institutional framework. Choosing a Singapore foundation as the issuing entity for the RWA project seems to be "only natural".

This article will outline and answer the following questions from the perspective of professional lawyers, combining legal frameworks and practical experiences from various countries.

• What is a foundation commonly referred to in the cryptocurrency industry? How does it differ from traditional foundations?
• Why do RWA projects usually choose foundations as the issuing entity? Is the foundation the only option?
• Why do people prefer to choose Singapore foundations as the main entity?
• In 2025, will the Singapore Foundation still be the optimal issuer for the RWA project? Are there any other regions or entities to choose from?

1. Definition and Characteristics of the Foundation

Although different countries have different definitions and structures for "foundations", most foundations at least have the following characteristics:

• Non-profit and public welfare: The foundation is established for public welfare purposes, and operating income is only used for reinvestment, without distributing benefits to members. Unlike a company, a foundation has no shareholders, only members.

• Independent legal entity: The foundation, as an independent legal entity, possesses its own assets and internal governance structure. Some foundations have a board of directors and a supervisory board responsible for daily management.

In contrast, traditional "funds" are essentially an investment tool or a collection of funds. What is commonly known as a "fund company" in the financial industry is actually a type of "fund manager". Fund companies raise investor funds to form a pool by issuing "fund products", manage it to generate returns, complete the fund's "raising, investing, managing, and returning", and charge management fees.

It can be seen that "基金"(Fund) and "基金会"(Foundation), although expressing similarities, have very different legal meanings.

2. Why does the cryptocurrency industry favor foundations?

First of all, foundations are usually non-profit and public welfare-oriented, established to promote social public welfare rather than to maximize the interests of centralized institutions or specific individuals, which aligns with the decentralized characteristics of the cryptocurrency industry. The foundation does not distribute benefits to members; members participate in governance only as managers. This characteristic also aligns with the community autonomy concept advocated in the Web3 field. Therefore, choosing a foundation as the main entity is beneficial for project packaging and promotion, making it easier to gain the trust of investors and community participants.

Secondly, many project teams choose foundations as entities, largely influenced by the Ethereum Foundation. As the second largest mainstream cryptocurrency by market capitalization, Ethereum chose a foundation as its operating entity. Due to Ethereum's significant position in the industry, the Ethereum Foundation wields substantial influence, which in turn affects many Web3 entrepreneurs' choice to select foundations as entities.

Finally, based on its non-profit nature, the foundation can obtain tax exemptions or benefits in many countries, thereby reducing the operational costs of the project.

In summary, the foundation has undergone long-term development abroad, and its institutional framework is very well-developed and mature. Its characteristics are highly compatible with the demands of the cryptocurrency industry. Practitioners and participants in the cryptocurrency space are showing a trend towards youthfulness, and they are also very interested in this traditional "old money" serious entity form that the foundation represents. This concept is gradually becoming a trend in the coin circle, attracting increasing attention.

However, it should be noted that from a legal perspective, completing the token issuance does not necessarily have to go through a foundation. RWA projects can also choose traditional private limited companies, joint-stock companies, and other profit-oriented entities as the coin issuance entity. Most projects choose foundations, possibly more due to commercial considerations such as publicity, operating costs, and tax planning. Practitioners should not overly revere foundations; they are not the only choice for RWA projects. Moreover, as a non-profit organization, a foundation can accept cryptocurrency assets but cannot normally open accounts in commercial banks in many countries. Therefore, using a foundation as the coin issuance entity usually also requires establishing a private limited company to cooperate.

III. The Singapore Foundation and Its Preferred Reasons

It should be noted that the "Singapore Foundation" is more like a common term in the cryptocurrency industry. From a legal perspective, there is no concept of a foundation in the traditional sense in Singapore law (Foundation). What the industry refers to as the "Singapore Foundation" actually refers to a legal entity recognized as a "Not-for-Profit Organization" (Not-for-Profit Organization) under Singapore law. Various legal entities can be recognized as non-profit organizations, such as public guarantee companies, associations, or charitable trusts. RWA project parties usually choose the guarantee company as this legal entity. Therefore, what the industry calls the "Singapore Foundation" is actually a guarantee company recognized as a "Not-for-Profit Organization."

In the past, the cryptocurrency industry often chose Singapore foundations as the issuer of coins for the following reasons:

1. The Singapore authorities have previously held an open and inclusive attitude towards the cryptocurrency industry. This is reflected in the approval of foundation registration applications as issuers of coins. At that time, many cryptocurrency projects could easily pass the relevant approvals and complete token issuance in the form of Singapore foundations.

2. The Singapore government actively supports the development of blockchain and cryptocurrencies, providing a globally leading legal framework and regulatory environment for token issuance. Cryptocurrencies are legal in Singapore, and contracts involving cryptocurrencies are not deemed illegal for this reason. Singapore has also established a comprehensive legal framework for cryptocurrencies, covering ICOs, taxation, anti-money laundering/anti-terrorism, and other aspects.

3. Singapore has a developed financial and legal infrastructure, which has long attracted international capital attention and has a high international reputation. Establishing an issue coin entity in Singapore can enhance the project's credibility and professionalism. Singapore and China are both in the East 8 time zone, with no time difference, making it very friendly for many Chinese players and project parties.

So in 2025, will the RWA project still be able to choose the Singapore foundation as the issuer of the coin?

From a purely legal perspective, Singapore has not explicitly prohibited local foundations from acting as issuers of coins. However, based on recent communications with local law firms, accountants, and company secretaries, there have been many compliance and regulatory issues arising from cryptocurrency companies established in the form of Singapore foundations in recent years. Subsequently, under pressure from public opinion and policy regulation, the Singapore authorities, led by ACRA(, the Accounting and Corporate Regulatory Authority of Singapore), began to significantly tighten the approval process for foundations engaged in the cryptocurrency industry.

Currently, it can be confirmed that ACRA will conduct a detailed background check when registering a foundation. Once any association with the cryptocurrency industry is discovered, the registration application will generally not be approved. Therefore, although it is legally feasible for the RWA project to choose a Singapore foundation as the issuer of the coin, it is practically almost impossible to realize.

4. Other Issuers for RWA Projects

Based on years of relevant business experience and successful cases, we recommend the following two options as the issuer of the coin:

1. American Foundation

The logic of choosing the U.S. foundation as the issuing coin entity is basically consistent with choosing the Singapore foundation, with the biggest difference being that the current U.S. regulatory agencies have a relatively open attitude towards token issuance activities. The new president holds a supportive attitude towards the entire cryptocurrency industry.

The registration cycle for foundations in the United States is relatively quick, with simple requirements and fewer restrictions. Taking Colorado as an example, the registration of a non-profit foundation can usually be completed within a week.

2. UAE Foundation or DAO organization

The overall structure of the UAE foundation is similar to that of the Singapore foundation. However, it is important to note that Singapore and the UAE belong to different legal systems. Singapore follows the common law system, while the UAE is based on Islamic law, leading to significant differences in legal applicability, judicial systems, and more. This distinction is crucial when dealing with complex compliance issues across legal jurisdictions.

The DAO organization ( decentralized autonomous organization ) is an organizational form based on blockchain technology that achieves autonomy through smart contracts. The UAE has established a complete set of regulations and a regulatory framework. According to the regulations, UAE DAO organizations have independent legal personality and possess non-profit characteristics.

According to the official disclosure from a certain exchange, it has reached a $2 billion investment deal with the Abu Dhabi investment institution MGX, marking the first time the exchange has introduced external institutional investors. One of the co-founders of MGX is from the Abu Dhabi sovereign fund in the UAE. The partnership between the sovereign fund and the largest mainstream exchange is expected to further promote the development of the cryptocurrency industry in the UAE. In the long term, the prospects for crypto development in the Middle East are promising.

In summary, the UAE foundation or DAO organization can also be an optional entity for issuing coins. However, the registration costs in the UAE are relatively high, making it more suitable for projects of a certain scale.

5. Risks and Considerations of Choosing the American Foundation as the Issuer of Coin

1. You need to obtain the relevant license, such as the MSB license issued by the Financial Crimes Enforcement Network ( FinCEN ).

2. The tense geopolitical relations between China and the United States lead to frequent changes in the U.S. regulatory attitude and strength towards offshore companies, creating uncertainty for long-term compliance operations.

3. The financial and corporate commercial laws in the United States are extremely complex, requiring a systematic understanding of federal and state laws, with high compliance difficulty and complexity.

4. The U.S. tax authority (IRS) has strict reviews. To establish a foundation entity in the U.S., it requires the support of a professional tax planning team to handle related tax issues; otherwise, there is a risk that corporate affiliates may be affected by long-arm jurisdiction.

VI. Conclusion

The regulatory outlook for the global cryptocurrency industry is still unclear. When Chinese project teams implement RWA projects, they must adhere to "compliance first". Therefore, RWA project teams need to work closely with a professional cryptocurrency industry legal team to jointly promote the implementation of the project.