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Cayman Finance reported on April 29 that nine tokenised investment funds have been conditionally registered with the Cayman Islands Monetary Authority, marking an early use of the jurisdiction's new statutory framework for tokenised fund interests. The registrations follow coordinated amendments passed in March 2026 to the Mutual Funds Act, the Private Funds Act and the Virtual Asset Service Providers Act. The nine funds were not named, their asset classes were not disclosed, and none were identified as real-estate-focused. Cayman Finance said the number is expected to grow as the new framework takes hold.
The amendments bring tokenised fund interests inside existing fund regimes
The legal approach Cayman took was integration rather than a parallel track. Rather than creating a wholly separate fund category for tokenisation, the amendments bring tokenised fund interests inside the existing mutual-fund and private-fund regimes. The Mutual Funds amendment defines a "digital equity token" as a digital representation of the whole of an equity interest in a mutual fund, while the Private Funds amendment defines a "digital investment token" as a digital representation of the whole of an investment interest in a private fund. Tokenised fund interests carry the same rights and protections as conventional fund interests. Transfers remain subject to operator approval under the offering document, and the legislation also gives CIMA authority to inspect the underlying technology and token transactions. Fund operators are required to maintain records on issuance, creation, sale, transfer and ownership, and to confirm those records annually to CIMA. Offering documents must disclose token-specific risks including cybersecurity and transferability risks.
The VASP carve-out removes the dual-licensing risk that had been slowing decisions
The non-trivial element of the framework is the VASP carve-out. The amendments exclude tokenised fund interests from the Virtual Asset Service Providers regime, eliminating the dual-licensing risk that had previously created regulatory uncertainty for fund managers considering tokenised structures. Tokenised funds that provide exchange, custody, transfer or other virtual-asset services to third parties remain subject to the VASP framework under the amended Act, but funds that simply issue tokenised interests to eligible investors do not. The practical effect is a clearer route for using digital tokens to represent fund interests without automatically triggering virtual-asset licensing obligations. Haymond Rankin, Associate Director for Banking, FinTech and Virtual Assets at Cayman Finance, said the March 2026 amendments gave managers a clear statutory route for tokenised fund structures without the dual-licensing risk that had been slowing decisions, and that the institutional pipeline is growing accordingly. Cayman is the world's largest offshore funds domicile, with more than 30,000 registered funds representing $16 trillion in total assets, and hosts approximately 58% of crypto and digital asset hedge funds globally.
