How to Choose the Coin Issuing Entity for RWA Projects Launched Overseas?

With the continuous improvement and development of the RWA regulatory framework, more and more RWA projects are starting to land overseas. The core of RWA projects is the tokenization of real-world assets. Once it involves the issuance of tokens, due to the high compliance requirements of various national laws and regulations regarding token issuance, project parties must prioritize "compliance first" when advancing RWA projects. The choice of the issuer of the coin is a fundamental yet very crucial aspect of the compliance issue in token issuance.

In recent years, due to an open regulatory attitude and a sound institutional framework, Singapore has gradually become a "cryptocurrency paradise" sought after by entrepreneurs and investors in the cryptocurrency industry, and choosing the Singapore foundation as the issuing body for the RWA project seems to have become "a matter of course."

Definition and Characteristics of Foundations

Although different countries have their own 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 the income generated from its operations is only used for reinvestment in the foundation and cannot be distributed to members as benefits. Unlike companies, foundations do not have shareholders; they only have members.

• Independent legal status: The foundation acts as an independent legal entity, possessing its own assets and internal governance structures. For example, some foundations have a board of directors and a supervisory board responsible for managing the daily operations of the foundation.

In contrast, the traditional concept of "fund" essentially belongs to a type of investment tool or a collection of capital pools. The commonly seen "fund companies" in the financial industry are actually a type of "fund managers". Fund companies raise investors' funds by issuing "fund products" to form a capital pool, and by managing this capital pool, they aim to generate returns for the investors, ultimately completing the "raising, investing, managing, and returning" of the fund, and charging management fees from it.

It can be seen that, although "基金"(Fund) and "基金会"(Foundation) are similar at the level of everyday expression, the meanings they express at the legal level are vastly different.

Why the Cryptocurrency Industry Favors Foundations

First of all, foundations typically have nonprofit and public welfare characteristics, and their establishment aims to promote the development of social public welfare, rather than maximizing the interests of centralized institutions or specific individuals. This aligns perfectly with the decentralized nature of the cryptocurrency industry. Moreover, foundations do not distribute profits to their members; members only participate as managers in the governance of the foundation. This characteristic also coincides with the governance framework of community autonomy that is advocated in the cryptocurrency industry and the Web3 field. Therefore, cryptocurrency entrepreneurs choose foundations as their entities not only to facilitate the packaging and promotion of their projects but also to more easily gain the trust of investors and community participants.

Secondly, more and more project teams are choosing to establish foundations as the entity of their projects, largely influenced by the well-known Ethereum Foundation. Ethereum (ETH), as the second largest mainstream cryptocurrency by market capitalization globally, has also chosen a foundation as its operating entity. Given Ethereum's significant position in the cryptocurrency industry, only second to Bitcoin, the Ethereum Foundation naturally holds great influence, which has also impacted many new entrepreneurs and players in the Web3 industry to choose foundations as their entities.

Finally, due to the non-profit nature of the foundation itself, under the laws of many countries, the foundation can obtain the right to tax exemption or specific tax benefits after meeting certain conditions or obtaining specific approvals. Therefore, choosing the foundation as the issuing entity can enjoy tax reductions or benefits, thereby lowering the operational costs of the project.

In summary, the foundation has undergone long-term development abroad, and its institutional framework is already very完善和成熟. Moreover, the characteristics of the foundation align very well with the various practical needs of the cryptocurrency industry. Additionally, as practitioners and participants in the cryptocurrency industry exhibit a significant trend towards youthfulness, they are also very interested in the foundation, a more serious entity form well-known to traditional "old money". Therefore, this concept has gradually become a trend in the coin circle, attracting more and more attention.

However, it should be noted that from a legal perspective, it is not necessarily required to issue tokens through a foundation. In fact, RWA project parties can also choose traditional profit-making entities such as private limited companies or joint stock companies as the issuer of coins. Most project parties choose a foundation as the issuer of coins, which may be more of a decision made from a comprehensive business perspective considering project promotion, operational costs, tax planning, and so on. Therefore, practitioners do not need to overly revere foundations, as they are not the only issuing entity for RWA projects. Moreover, as a non-profit organization, although a foundation can accept cryptocurrency assets, it cannot open accounts normally in commercial banks in many countries or regions. Therefore, if using a foundation as the issuing entity, it is usually necessary to establish a private limited company to complement it.

Singapore Foundation and Its Advantages

It should be noted that the so-called "Singapore Foundation" is more like a customary term within the cryptocurrency industry. From a legal perspective, there is actually no concept of a traditional foundation (Foundation) in Singaporean law. What is commonly referred to as the "Singapore Foundation" in the cryptocurrency industry actually refers to a legal entity recognized as a "Not-for-Profit Organization" (Not-for-Profit Organization) under Singaporean law. Many types of legal entities can be recognized as non-profit organizations, such as a Public Company Limited by Guarantee (Public Company Limited by Guarantee), associations, or charitable trusts. For RWA project parties, it is common to choose the limited guarantee company as the legal entity. Therefore, the so-called "Singapore Foundation" in the cryptocurrency industry is actually a limited guarantee company recognized as a "Not-for-Profit Organization."

The main reasons why the cryptocurrency industry often chooses the Singapore Foundation as the issuer of coins are as follows:

• One reason is that in the past few years, the Singapore authorities have taken a relatively open and inclusive attitude towards the entry of the cryptocurrency industry into Singapore. This can be specifically reflected in the approval process for the registration applications of foundations as coin issuance entities. At that time, many cryptocurrency projects could easily pass the relevant approvals and complete token issuance in the form of Singapore foundations.

• Secondly, this is because in recent years, the Singapore government has actively supported the development of blockchain and cryptocurrencies, providing a globally leading legal framework and regulatory environment for token issuance activities. Cryptocurrencies are not only recognized as legal in Singapore, but any contracts involving cryptocurrencies will not be deemed illegal simply due to their involvement with cryptocurrencies. At the same time, Singapore has also formulated a comprehensive legal framework for cryptocurrencies, with relevant laws and regulations covering various aspects such as ICO( initial coin issuance), taxation, anti-money laundering/anti-terrorism, and the purchase/trading of virtual assets.

• Finally, Singapore has a very developed financial and legal infrastructure, which has attracted a high level of attention from various international capital for a long time, and it has a good international reputation. Therefore, establishing an issue coin entity in Singapore will give the project higher credibility and professionalism. At the same time, Singapore and China are both in the East 8 Time Zone, so there is no time difference between the two, which is also very friendly for the large number of Chinese players and project parties in the coin community.

So in 2025, can the RWA project still choose the Singapore foundation as the issuer of the project coin?

From a purely legal perspective, the Singapore authorities have not explicitly prohibited Singapore foundations from acting as issuers of coins in Singapore. However, in recent years, many compliance and regulatory issues have arisen for cryptocurrency companies established in the form of Singapore foundations. Subsequently, due to public opinion and pressure from policy regulations, the Singapore authorities, led by ACRA(, the Accounting and Corporate Regulatory Authority), have begun to significantly tighten the approval process for foundations involved in the cryptocurrency industry.

Based on mutual verification of multiple sources, it can be confirmed that ACRA will conduct a detailed background check on the foundation at the time of registration. Once a potential connection between the foundation and the cryptocurrency industry is found, the registration application is generally not approved. Therefore, while the choice of a Singapore foundation as the issuing coin entity for the RWA project still has legal feasibility, it has essentially been blocked in practice.

Other selectable issue coin subjects

In addition to the Singapore Foundation, the RWA project can also choose the following entities to issue coins:

American Foundation

The logic of choosing the American foundation as the issuer of the coin is basically consistent with the logic of choosing the Singapore foundation as the issuer; the biggest difference between the two is that currently, American regulatory agencies have a relatively open attitude towards token issuance activities. Moreover, the new president Trump also has a supportive attitude towards the cryptocurrency industry as a whole.

The registration cycle for foundations in the United States is relatively fast, with simple requirements and fewer restrictions. Taking Colorado as an example, registering a nonprofit foundation in Colorado can generally be completed within a week.

UAE Foundation or DAO organization

The overall structure of the foundation in the UAE is also quite similar to that of the Singapore foundation. However, it is important to note that Singapore and the UAE belong to different legal systems. Singapore is a common law country, while the UAE is an Islamic law country, and there are significant differences between the two in terms of applicable laws, judicial systems, and so on. This is crucial when dealing with complex compliance issues across legal jurisdictions.

The DAO organization (, Decentralized Autonomous Organization, is a form of organization based on blockchain technology that achieves autonomy through smart contracts. In response to this novel organizational form, the UAE authorities have issued a comprehensive set of regulations ), the "DAO Association Regulations", and corresponding regulatory frameworks. According to the relevant regulations, DAOs in the UAE possess independent legal personality and also have non-profit characteristics.

At the same time, according to information disclosed by a certain exchange, it is known that this exchange has officially reached an investment deal totaling $2 billion with the investment institution MGX in Abu Dhabi, marking the first time since its establishment that the exchange has introduced external institutional investors. One of the co-founders of the investment institution MGX is the Abu Dhabi Sovereign Fund of the UAE. The strong alliance between the UAE Sovereign Fund and the largest mainstream exchange in the crypto space is expected to further promote the development of the cryptocurrency industry in the UAE. Therefore, in the long term, the prospects for crypto development in the Middle East are indeed worth looking forward to.

In summary, the UAE foundation or DAO organization is also a viable option for issuing coins. However, choosing to register a foundation or DAO in the UAE can be relatively costly, making it more suitable for projects of a certain scale.

Risks and Considerations of the American Foundation as the Issuer of Coins for the RWA Project

If you choose the American Foundation as the issuer of the RWA project, you need to be aware of the following risks and bottlenecks:

First, in the United States, issuing tokens in the form of a foundation requires obtaining the relevant license, such as the MSB license issued by the Financial Crimes Enforcement Network (FinCEN).

Secondly, due to the tense geopolitical relations between China and the United States, the U.S. regulatory attitudes and intensity towards offshore companies often change, which can bring uncertainty to the company's long-term compliance operations.

Moreover, the financial and corporate commercial laws in the United States are exceptionally complex, requiring a systematic understanding of federal and state laws, which makes compliance more difficult and complex.

Finally, the tax review of the American tax authority (IRS) is very strict, as the American saying goes: In life, only death and taxes are inevitable. Therefore, when establishing a foundation in the United States, it is necessary to have a professional tax planning team to support and handle related tax issues; otherwise, the related parties of the enterprise are at risk of being affected by the long-arm jurisdiction of the United States.

Conclusion

The regulatory outlook for the global cryptocurrency industry remains uncertain.