‘Tokenisation’ means using blockchain or similar technology to digitally represent an investor's equity or interest in a fund, usually while maintaining a traditional position with respect to legal ownership and rights.

The new framework created by the three proposed instruments aims to provide clear and unambiguous guidance and address previous uncertainties as to whether funds that are tokenised are still regulated under existing fund laws, such as the Mutual Funds Act and Private Funds Act, or whether they should be treated as regulated under the Virtual Asset (Service Providers) (VASP) Act due to the tokenisation of interests in the funds.

Key updates include:

• Definitions for digital equity and investment tokens.
• Enhanced recordkeeping and transferability provisions.
• Disclosure of technology-specific risks.
• Expanded supervisory powers for the Cayman Islands Monetary Authority (CIMA).

The Virtual Asset (Service Providers) (VASP) Act has also been clarified to exclude regulated tokenised funds from being classified as virtual asset issuers, unless they provide virtual asset services like exchange or custody.

These amendments reinforce the Cayman Islands' position as a leader in financial services innovation, ensuring technological advancements occur within a transparent and internationally credible regulatory environment.

The official press release can be found here

Mutual Funds (Amendment) Bill, 2026 can be accessed here

The Private Funds (Amendment) Bill, 2026 can be accessed here

The Virtual Asset (Service Providers) (Amendment) Bill, 2026 can be accessed here