How Does DigiFT Work?

DigiFT issues on-chain security tokens representing ownership of underlying RWA assets including US Treasury bills, bank bonds, and money market funds under MAS and SFC regulatory frameworks

Regulated security token issuance follows established frameworks. Key differentiator is dual-jurisdiction licensing (Singapore MAS + Hong Kong SFC).

Underlying assets are held by licensed custodians with regulatory oversight, with on-chain tokens representing beneficial ownership claims against custodied assets

Traditional custodial model mapped onto blockchain rails. Custodian failure or freeze risk remains identical to TradFi custody arrangements.

On-chain decentralized exchange for trading tokenized RWA securities with KYC/AML-gated access, enabling secondary market trading of tokenized treasuries and bonds

Regulated on-chain DEX for securities is a relatively novel hybrid model combining DeFi exchange mechanics with TradFi compliance requirements. Permissioned access limits composability.

Yield from underlying treasury bills, bonds, and MMFs passes through to token holders via periodic distributions or token value accrual

Standard pass-through yield mechanism. Yield depends entirely on underlying asset performance and custodian distribution mechanics.

All participants must complete KYC/AML verification before accessing the platform, with transfer restrictions enforced at the smart contract level

On-chain KYC enforcement via transfer restrictions is becoming standard for regulated RWA platforms. Creates walled garden that limits DeFi composability.

DigiFT-distributed tokenized RWAs (e.g., UBS uMINT) are integrated as eligible collateral in DeFi lending protocols like Secured Finance

Using regulated RWA tokens as DeFi collateral bridges TradFi and DeFi. Novel composability model but introduces cross-system risk if underlying RWA redemption fails during liquidation.

Tokenized RWAs used as DeFi collateral (e.g., UBS uMINT on Secured Finance) create cross-system risk: during market stress, DeFi liquidation mechanisms may attempt to sell RWA tokens that have transfer restrictions or redemption delays, causing failed liquidations and bad debt.

Operating under both MAS and SFC licenses creates regulatory surface area — adverse action by either regulator could force platform changes or asset freezes. Conflicting regulatory requirements between jurisdictions could create operational constraints.

Permissioned token transfers limit the buyer pool for secondary market trading. During redemption waves, restricted transferability could create liquidity bottlenecks where sellers cannot find eligible buyers, forcing reliance on primary market redemption which may have delays.

Disconnect between on-chain token state and off-chain custodied asset state creates reconciliation risk. Custodian operational failures, sanctions compliance actions, or asset freezes may not be immediately reflected on-chain, leading to tokens trading above actual redeemable value.