Gibraltar mulls allowing tokenized fund shares for some companies

Gibraltar has introduced legislation that would legally recognize tokenized fund shares and allow certain regulated funds to issue shares on distributed ledger systems, granting investors the same rights as traditional shareholdings.

The Protected Cell Companies (Amendment) Bill 2026 states that “the holder of a share token is a shareholder with the same rights and obligations as any other holder of cell shares,” referring to shares linked to specific asset pools within a protected cell company.

Protected cell companies, typically insurance or financial entities, have a core organization that is linked to several independent cells, each with its own balance sheet.

The proposal, which requires approval from the Gibraltar Financial Services Commission, applies to protected cell companies operating as experienced investor funds. Ownership records must be maintained on blockchain-based share registers, with tokenized shares legally equivalent to traditional certificates.

Source: Gibraltarlaws.gov.gi

The framework sets strict rules for custody and transfers, limiting access to verified investors and allow-listed wallet addresses while requiring disclosures on technology risks, cybersecurity and recovery procedures. 

Companies must retain control over the underlying infrastructure, keeping the system within a regulated environment rather than an open, permissionless market.

Under the proposal, tokenized shares can be issued and transferred using smart contracts and cryptographic signatures, with blockchain records recognized as valid instruments for ownership, transfer and recordkeeping under existing company law.

The bill must now proceed through Gibraltar’s legislative process before taking effect.

Related: ECB backs tokenized EU capital markets with strict guardrails

Tokenized assets move from pilots to regulated markets

Governments and financial institutions are integrating tokenized assets into regulated financial systems, developing legal frameworks and market infrastructure for blockchain-based securities.

Switzerland was among the earliest jurisdictions to bring tokenized assets under existing financial law, with its regulator approving a crypto fund in 2021 for qualified investors. In 2025, the country expanded that framework by licensing its first distributed ledger technologies (DLT) trading facility, enabling tokenized securities to be traded and settled on regulated infrastructure.

In 2022, Singapore launched Project Guardian to test tokenized assets in wholesale markets, while Hong Kong has issued and expanded a program of tokenized government bonds since 2023.

Source: www.hkma.gov

In 2024, the World Bank issued a Swiss franc digital bond on Switzerland’s SIX Digital Exchange with settlement using central bank digital currency.

Most recently, in March, Canada completed a pilot that issued and settled its first tokenized bond on distributed ledger infrastructure.

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