Cayman Islands Government streamlines tokenised funds legislation
09 February 2026 Cayman Islands
Image: WardM/adobe.stock.com
The Cayman Islands Government has published three legislative bills to confirm a
framework for tokenised investment fund structures in the jurisdiction, in an effort to provide regulatory clarity for funds professionals and investors.
The Mutual Funds (Amendment) Bill, 2026, Private Funds (Amendment) Bill, 2026, and the Virtual Asset (Service Providers) (Amendment) Bill, 2026 are expected to be presented in Parliament next month.
The Hon. André Ebanks, Premier and Minister for Financial Services and Commerce, set to present the bills, remarks: “These legislative enhancements demonstrate the Cayman Islands’ commitment to remaining at the forefront of global financial services innovation while maintaining the strong regulatory standards for which our country is recognised.
“By providing clear statutory frameworks for tokenised funds, we are ensuring that technological advancements can occur within a predictable, transparent, and internationally credible regime. This strengthens investor confidence, supports the resilience of our financial services sector, and enhances Cayman’s competitiveness in an evolving global marketplace.”
Tokenised fund structures offer potential efficiencies for recordkeeping, transfer controls, settlement processes and investor onboarding.
Tokenised funds have been present in the Cayman Islands for several years, however the absence of express statutory provisions led to uncertainty, particularly regarding whether the issuance of digital tokens representing an ownership interest in a fund could fall within the scope of the Virtual Asset (Service Providers) Act (VASP Act).
Following consultation with industry stakeholders and the Cayman Islands Monetary Authority (CIMA), the Ministry of Financial Services and Commerce concluded that tokenised funds are most appropriately regulated within Cayman’s existing funds framework.
The amendments ensure that tokenised mutual funds and tokenised private funds remain subject to the Mutual Funds Act and Private Funds Act, preserving strong investor protection and anti-money laundering and countering the financing of terrorism oversight.
Specifically, the mutual funds and private funds bills introduce certain statutory provisions for
tokenised funds, including: definitions of digital equity tokens and digital investment tokens.
Haymond Rankin, associate director for virtual assets and banking sectors at Cayman Finance, comments: “By addressing how tokenised mutual funds and private funds are treated under Cayman law, the proposed amendments help reduce uncertainty while maintaining appropriate regulatory oversight.
“Cayman is already a leading jurisdiction for investment funds and digital asset structures. These amendments, together with the new market conduct measures, support the responsible development of tokenised funds by bringing innovation within a framework that is designed to protect market integrity and investor interests.
"As the consultation progresses, industry input will be important to ensure the rules are practical in implementation and deliver the intended clarity at scale.”
framework for tokenised investment fund structures in the jurisdiction, in an effort to provide regulatory clarity for funds professionals and investors.
The Mutual Funds (Amendment) Bill, 2026, Private Funds (Amendment) Bill, 2026, and the Virtual Asset (Service Providers) (Amendment) Bill, 2026 are expected to be presented in Parliament next month.
The Hon. André Ebanks, Premier and Minister for Financial Services and Commerce, set to present the bills, remarks: “These legislative enhancements demonstrate the Cayman Islands’ commitment to remaining at the forefront of global financial services innovation while maintaining the strong regulatory standards for which our country is recognised.
“By providing clear statutory frameworks for tokenised funds, we are ensuring that technological advancements can occur within a predictable, transparent, and internationally credible regime. This strengthens investor confidence, supports the resilience of our financial services sector, and enhances Cayman’s competitiveness in an evolving global marketplace.”
Tokenised fund structures offer potential efficiencies for recordkeeping, transfer controls, settlement processes and investor onboarding.
Tokenised funds have been present in the Cayman Islands for several years, however the absence of express statutory provisions led to uncertainty, particularly regarding whether the issuance of digital tokens representing an ownership interest in a fund could fall within the scope of the Virtual Asset (Service Providers) Act (VASP Act).
Following consultation with industry stakeholders and the Cayman Islands Monetary Authority (CIMA), the Ministry of Financial Services and Commerce concluded that tokenised funds are most appropriately regulated within Cayman’s existing funds framework.
The amendments ensure that tokenised mutual funds and tokenised private funds remain subject to the Mutual Funds Act and Private Funds Act, preserving strong investor protection and anti-money laundering and countering the financing of terrorism oversight.
Specifically, the mutual funds and private funds bills introduce certain statutory provisions for
tokenised funds, including: definitions of digital equity tokens and digital investment tokens.
Haymond Rankin, associate director for virtual assets and banking sectors at Cayman Finance, comments: “By addressing how tokenised mutual funds and private funds are treated under Cayman law, the proposed amendments help reduce uncertainty while maintaining appropriate regulatory oversight.
“Cayman is already a leading jurisdiction for investment funds and digital asset structures. These amendments, together with the new market conduct measures, support the responsible development of tokenised funds by bringing innovation within a framework that is designed to protect market integrity and investor interests.
"As the consultation progresses, industry input will be important to ensure the rules are practical in implementation and deliver the intended clarity at scale.”
NO FEE, NO RISK
100% ON RETURNS If you invest in only one asset servicing news source this year, make sure it is your free subscription to Asset Servicing Times
100% ON RETURNS If you invest in only one asset servicing news source this year, make sure it is your free subscription to Asset Servicing Times
