RWA Project Overseas Landing: Issue Coin Subject Selection and Risk Analysis

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 the tokenization of real-world assets. When it involves token issuance, due to strict regulatory requirements in various countries, project parties must prioritize compliance. The choice of the issuing entity is a fundamental and critical aspect of the compliance issues related to token issuance.

In recent years, Singapore has gradually become a "cryptocurrency paradise" favored by entrepreneurs and investors in the cryptocurrency industry due to its open regulatory attitude and完善的制度框架. Choosing the Singapore foundation as the主体 for the RWA project to issue coin seems to have become "a matter of course".

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

• What is a foundation in the cryptocurrency industry? How does it differ from traditional funds?
• Why do RWA projects often choose foundations as the issuer of coins? Is there no other choice?
• Why is the Singapore Foundation so favored?
• As of 2025, is the Singapore Foundation still the best issuer of coins for RWA projects? Are there any other options available?

1. Concept of Foundation and Its Differences from Traditional Funds

Although the definition of "foundation" varies from country to country, most have the following characteristics:

1. Non-profit and public welfare: Established for public welfare purposes, with income solely used for reinvestment and not distributed to members. No shareholders, only members.

2. Independent legal entity status: As an independent legal entity, it possesses its own assets and internal governance structure. For instance, some foundations establish a board of directors and a supervisory board to manage daily affairs.

In contrast, traditional "funds" are essentially investment tools or capital pools. Commonly seen in the financial industry, "fund companies" are actually a type of "fund manager". Fund companies raise funds by issuing products to form a capital pool, manage the funds to generate returns for investors, complete the processes of "raising, investing, managing, and returning", and charge management fees.

It can be seen that "fund" and "foundation" express similar meanings, but their legal implications are very different.

2. Reasons for the Cryptocurrency Industry's Preference for Foundations

First of all, the non-profit and public welfare characteristics of the foundation align with the decentralized nature of the cryptocurrency industry. The foundation does not distribute benefits to its members; members only participate as managers in governance, which is consistent with the community autonomy concept advocated by Web3. Choosing a foundation is beneficial for project packaging and promotion, making it easier to gain the trust of investors and the community.

Secondly, influenced by the Ethereum Foundation. As the second largest cryptocurrency in the world, Ethereum has chosen the foundation as its operating entity. Its influence has led many Web3 entrepreneurs to follow suit.

Finally, the foundation may enjoy tax reductions or benefits, lowering the project's operating costs.

In summary, the foundation system is mature and well-developed, with characteristics that align with the needs of the cryptocurrency industry. Young practitioners are interested in this serious institutional form, familiar to traditional "old money," making it a trend in the coin circle.

It should be noted that, from a legal perspective, token issuance does not necessarily require a foundation as the main entity. RWA projects can also choose traditional companies as the issuer. Choosing a foundation is more based on commercial considerations. Practitioners should not be superstitious about foundations; they are not the only option. Additionally, foundations, as non-profit organizations, often cannot open bank accounts in many regions and usually need to establish supporting companies.

III. Singapore Foundation and Its Preferred Reasons

The "Singapore Foundation" is a commonly used term in the industry. Singaporean law does not actually have a traditional foundation concept, referring instead to legal entities recognized as "non-profit organizations," such as public guarantee companies, associations, or charitable trusts. RWA projects typically choose guarantee companies.

The main reason for choosing the Singapore Foundation as the issuer of the coin was:

1. Singapore has an open attitude towards cryptocurrency, and the foundation registration approval is relatively lenient.

2. The Singapore government supports the development of blockchain and cryptocurrency, providing a globally leading legal framework and regulatory environment. Cryptocurrency is legal, and related contracts are valid. Regulations cover aspects such as ICO, taxation, and anti-money laundering.

3. Singapore has a developed financial and legal infrastructure, attracting international capital attention and has a good international reputation. Setting up a main entity here increases project credibility. Additionally, it shares the same time zone with China, making it friendly to Chinese players.

Can we still choose the Singapore Foundation as the issue coin entity in 2025?

Legally not explicitly prohibited, but basically impractical in practice. In recent years, after compliance issues arose with relevant foundations, the Singapore authorities have significantly tightened approvals. ACRA will conduct a detailed background check, and once it discovers any connection to cryptocurrency, it will generally not approve the registration application.

4. Other Optional Issuers for RWA Projects

Recommend the following two options:

1. American Foundation

The selection logic is similar to that of the Singapore foundation, with the difference being that the United States is still relatively open to token issuance. The new president supports cryptocurrency overall. Moreover, the registration process for foundations in the U.S. is quick and has low barriers to entry. For example, it can be completed within a week in Colorado.

2. UAE Foundation or DAO Organization

The structure of the UAE foundation is similar to that of Singapore, but the legal systems are different. The UAE follows Islamic law, which needs to be considered when dealing with compliance issues across legal jurisdictions.

The UAE has established a complete set of rules and regulatory framework for DAO organizations. DAOs have independent legal person status and are non-profit.

Binance has reached a $2 billion investment deal with the Abu Dhabi investment agency MGX, expected to promote the development of cryptocurrency in the UAE. In the long term, the crypto prospects in the Middle East are worth looking forward to.

The cost of options in the UAE is relatively high and is suitable for projects of a certain scale.

V. Risks and Considerations of the U.S. Foundation as the Issuer of Coins for the RWA Project

1. Obtain the necessary licenses, such as the MSB license from FinCEN.

2. The tension in China-U.S. relations has led to changes in regulatory attitudes and intensity, increasing uncertainty in long-term compliance operations.

3. The financial and corporate commercial laws in the United States are complex, requiring an understanding of federal and state laws, making compliance difficult.

4. The United States has strict tax audits, requiring support from a professional tax planning team; otherwise, related parties may face the risk of long-arm jurisdiction.

VI. Conclusion

The global cryptocurrency regulatory outlook is unclear, and when Chinese project parties implement RWA projects, they must prioritize "compliance first." Project parties need to work closely with a professional cryptocurrency industry legal team to facilitate the project's implementation.