On 11 December 2025 a gold-backed token called TER launched on the Solana network, issued under a sovereign framework of the Gelephu Mindfulness City, with custody provided by DK Bank, described as Bhutan's first licensed digital bank. The following day the GMC Authority appointed Matrixdock, the tokenisation arm of Matrixport, as key technology provider for TER's tokenisation infrastructure. Eva Meng, head of Matrixdock, called it a defining step forward in the evolution of sovereign digital finance. The interesting part for a lawyer is not the launch. It is that GMC did not need to write a new law to make it possible.
In short
- Stablecoin issuance is a named regulated activity in GMC's primary financial services statute, under the term "issuing a fiat-referenced token".
- The specified investment list in the same statute covers shares, debt instruments, fund units, certificates representing other instruments, options, futures, structured products and environmental instruments. A token carrying those rights is regulated because of the rights, not the wrapper.
- Where a token is not a specified investment, it may still be a virtual asset or a fiat-referenced token, and dealing, custody, venue operation and money services in relation to it are regulated.
- Algorithmic stablecoin tokens and privacy tokens are prohibited outright by statute.
- The regulator decides what counts as an accepted virtual asset, fiat-referenced token or spot commodity. Listing is a regulatory question.
- The tax position is 15% on company chargeable income unless an approval says otherwise, and the two approval routes close on 31 December 2030.
The classification question, answered properly
Every tokenisation project reduces to one question: what is this thing, legally. GMC's Financial Services Act 2025 answers it with a structure rather than a label, in three layers.
Layer one: is the token a specified investment? The Act lists specified investments in a schedule: deposits, contracts of insurance, shares, instruments creating or acknowledging indebtedness, government and public instruments, entitlements to investments, certificates representing certain financial instruments, fund units, options, futures, contracts for differences, credit facilities, rights and interests, structured products and environmental instruments. If a token's rights fall inside one of those descriptions, the token is a specified investment. Nothing turns on whether the register is a database or a blockchain.
The certificates category deserves particular attention. It captures certificates or other instruments conferring contractual or property rights in respect of a listed investment held by someone other than the person on whom the rights are conferred, where transfer can be effected without that holder's consent. That describes many depository-style tokens, where a custodian holds an underlying instrument and a token conveys rights against it, transferable on chain. Certificates conferring rights in respect of two or more investments issued by different persons are excluded, which pushes basket structures elsewhere.
Layer two: is the token a fiat-referenced token? The Act defines that as a digital asset, transferred and stored using distributed ledger or similar technology, whose purpose is to be used as a medium of exchange with a stable store of value, by referencing a fixed amount of a single fiat currency and enabling the holder to redeem it from the issuer, on demand, for that amount. Two elements do the work: a single fiat currency, and redemption on demand. Issuing such a token is a specified kind of activity in its own right.
Layer three: is the token a virtual asset? The Act defines a virtual asset as a digital representation of value that can be digitally traded and functions as a medium of exchange, a unit of account or a store of value, without legal tender status in any jurisdiction, and neither issued nor guaranteed by any jurisdiction. A token that is neither a specified investment nor a fiat-referenced token will commonly land here, and the activities that matter then are dealing, custody, arranging, operating a trading venue and providing money services.
Alongside those three sits the spot commodity: any physical or energy good of a fungible nature capable of being delivered and which is or can be traded on a secondary market. Licensed firm activity in relation to spot commodities is treated in the same statutory breath as virtual assets and fiat-referenced tokens.
Why stablecoins being in the primary Act matters
Most regimes that regulate stablecoins do it through subordinate instruments: a payments regulation, a regulator's rules, a guidance note. That works, and it also means the perimeter can move without going near a legislature. GMC instead put issuing a fiat-referenced token into the schedule of regulated activities in the Act itself, next to accepting deposits and effecting contracts of insurance. Three consequences follow from the definition. The perimeter is stable, because changing whether stablecoin issuance is licensable requires amending the Act. The obligations are integrated: a licensed issuer is a licensed firm, subject to the General Rulebook's twelve Principles for Licensed Firms, the requirements on management, systems and controls, the approved persons and controlled functions regime, accounting, audit and regulatory returns, and complaints handling. It does not sit in a bespoke regime that nobody has supervised before.
And the statute is willing to say no. The Act provides that no person may carry on a regulated activity in GMC involving the issue, sale, purchase, transfer or custody of a virtual asset or fiat-referenced token that is an algorithmic stablecoin token, a privacy token, or any digital asset employing similar technology. A jurisdiction that wanted only volume would not have written that sentence.
There is also an overlay of regulatory discretion. The regulator may prescribe by rules the requirements applicable to licensed firms conducting regulated activity in relation to virtual assets, fiat-referenced tokens or spot commodities, and the factors determining whether an asset qualifies as accepted. It may exclude requirements, impose additional obligations, require specified action, and require a firm operating a multilateral trading facility admitting such assets to become a licensed exchange. Whether a token can be listed, custodied and dealt in by licensed firms is a live regulatory question, not a commercial one.
Real-world assets: gold, carbon and structured payoffs
Three categories in the specified investment list make GMC unusually well suited to real-world asset work.
Environmental instruments. The Act defines an environmental instrument as a financial instrument recognised by the regulator that enables its holder to emit greenhouse gases under an emissions trading scheme, attests to the reduction or removal of greenhouse gases, or attests to the environmental attributes of an underlying unit such as renewable energy certificates. In plain terms: emissions allowances, carbon credits and renewable energy certificates, named in primary legislation as investments. Carbon credit projects spend years elsewhere arguing about whether the credit is property, a commodity, a licence or nothing at all. Here the category exists, subject to recognition by the regulator.
Structured products. The Act defines a structured product as a financial instrument comprising rights under a contract where each party's gain or loss is determined by reference to fluctuations in the value or price of property, an index, an interest rate or an exchange rate, without leverage; where gain or loss is wholly settled in cash or by set-off; where no party is exposed to contingent liabilities to a counterparty; and where public information on the underlying factor is readily available. Delivery of the underlying property, debentures and contracts of insurance are excluded. That is a precise template for a tokenised, cash-settled, reference-linked payoff.
Gold and metals. A gold-backed token is the hardest to generalise about, because classification depends on what the holder owns. Rights against a custodian in respect of a held instrument point towards the certificates category. An entitlement to delivery of fungible physical metal points towards spot commodities. A cash-settled price tracker points towards structured products. A token that does none of those but trades as a store of value points towards the virtual asset definition. Four plausible destinations, one product description, and the difference decides which licences the issuer, the venue and the custodian each need. That is why the TER structure is instructive: a gold-backed token issued under a sovereign framework, with custody at a licensed digital bank and tokenisation infrastructure from an appointed provider, is a structure in which the custody leg, the issuance leg and the infrastructure leg each sit with an identified party. A project files well when it can draw that diagram.
The tax overlay, stated accurately
The claim that GMC offers 0% corporate tax does not survive contact with the Income Tax Act 2025, which levies tax on every company or body of persons at 15% on every dollar of chargeable income. Two approval regimes create exceptions to the general rate. An approved founders company, in an industry the designated officer approves as a founders industry, has its qualifying business income exempt for a period capped at fifteen years including extensions, with no approvals after 31 December 2030. An approved strategic and development company pays a concessionary rate of not less than 5%, capped at twenty years, with no approvals after the same date. Individuals who are not citizens of Bhutan pay 0% on chargeable income derived on or before 31 December 2030. Dividends paid by a GMC-resident company are exempt income. A platform planning a ten-year build should note which of those dates is an approval deadline and which is an income deadline, because they behave very differently.
How the regulator completes the picture
Whether an asset is accepted is determined by requirements and factors the regulator prescribes by rules, and an environmental instrument is one recognised by the regulator, so issuers confirm the position under those rules alongside the statute.
On the property characterisation of a token, the proprietary effect of an on-chain transfer, and the position of token holders in a custodian insolvency, GMC courts can rely on common law precedents from any common law jurisdiction together with the applied insolvency statute, so a settled body of case law is available from the day the jurisdiction opened.
Minimum capital by licence category, fees and processing times are set by the prudential rules or by the regulator. The Income Tax Act also provides an asset securitisation exemption and fund manager exemptions that a tokenisation group can plan around.
Frequently asked questions
Is a tokenised bond a security in GMC?
If the token creates or acknowledges indebtedness, or confers rights in respect of an instrument that does, it falls within the specified investment list, and dealing, arranging, advising, custody and venue operation in relation to it are regulated. The ledger is a method of record-keeping, not a change of legal character.
Can I issue a gold-backed token from GMC?
There is a clear statutory framework, but the licensing analysis depends on what the holder owns. The certificates, spot commodity, structured product and virtual asset routes lead to different permissions for the issuer, the venue and the custodian. Settle the rights before settling the technology.
Are carbon credits regulated in GMC?
Environmental instruments recognised by the regulator are specified investments under the Financial Services Act 2025, and that category expressly contemplates emissions allowances, carbon credits and renewable energy or environmental attribute certificates.
What is the difference between a stablecoin and a virtual asset here?
A fiat-referenced token references a fixed amount of a single fiat currency and is redeemable on demand from the issuer. A virtual asset is a digital representation of value with no legal tender status, not issued or guaranteed by any jurisdiction. Issuing the first is a named licensable activity; the second is caught through the activities conducted in relation to it.
Can I launch an algorithmic stablecoin in GMC?
No. The Act prohibits regulated activity involving the issue, sale, purchase, transfer or custody of an algorithmic stablecoin token or a privacy token, or any digital asset employing similar technology.
The bottom line
Tokenisation projects usually fail on classification rather than technology, because the statute they work under was written before the product existed. GMC's was written after, and it shows: stablecoin issuance named in the primary Act, structured products and environmental instruments on the specified investment list, a certificates category that captures depository-style tokens, a spot commodity concept for physical goods, and a prohibition that draws a firm line rather than leaving one to be inferred. The market is already using it in public, with a gold-backed token live since December 2025 and an appointed infrastructure provider behind it. On what token holders own when something goes wrong, GMC courts can draw on the precedents of the common law world. Build the structure so that question does not need to be asked.
This article is general information about the law of the Gelephu Mindfulness City Special Administrative Region as at the date above. It is not legal advice and does not create a lawyer-client relationship.
You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.
Sources
- Financial Services Act 2025 (Law No. 5 of 2025): s. 5A (rules and accepted asset determinations; s. 5A(4) prohibition on algorithmic stablecoin tokens and privacy tokens); s. 5B (general direction power); Schedule 1 Part 2 paragraphs 4, 12, 16, 43, 46, 52, 53B, 54, 56, 59; Schedule 1 Part 3 paragraphs 85 to 99B, in particular 87 (shares), 88 (instruments creating or acknowledging indebtedness), 91 (entitlements), 92 (certificates representing certain financial instruments), 93 (units in a collective investment fund), 99A (structured products) and 99B (environmental instruments); definitions of Virtual Asset, Accepted Virtual Asset, Fiat-Referenced Token, Spot Commodity and Specified Investment.
- GEN Rulebook 2026, Version 1.0: Chapter 2 (Principles for Licensed Firms); Chapter 3 (management, systems and controls); Chapter 5 (licence applications, controlled functions and approved persons); Chapter 6 (accounting and auditing); Chapter 7 (complaints handling).
- Income Tax Act 2025 (Law No. 6 of 2025): s. 1(3); s. 13(1)(za); s. 13M (asset securitisation); s. 13Y and s. 13Y(5), (8); s. 43(1)(a); s. 43(1)(ba); s. 43D and s. 43D(4), (7).
- Application of Laws Act 2024 (Law No. 1 of 2024), ss. 3 to 5 and Schedules A and B.
