British Virgin Islands emerges as tokenization hub

Entities incorporated in the British Virgin Islands accounted for roughly $1.5 billion of the $14.98 billion global market for tokenized US Treasuries as of June 1. The territory also hosts about 305 tokenized securities, a stablecoin market cap near $1.2 billion linked to BVI addresses and roughly 28,000 stablecoin holders. More than 25 virtual asset service providers have been approved under the BVI regime.

Several well-known digital asset firms use BVI entities for legal purposes, including Payward (Kraken’s parent), Bitstamp, 1inch and Bitfinex. These incorporations are typically set up as token issuers, treasury vehicles, holding companies or special purpose vehicles rather than operational headquarters.

Legal and regulatory clarity are cited by advisers and industry executives as primary reasons for choosing the BVI. Andrew Jowett, a partner at Appleby (BVI) Ltd who advises digital asset firms on corporate structuring, noted that clients prioritize digital asset regulation over tax considerations. The BVI does not impose corporate income tax or capital gains tax on BVI companies, but similar tax neutrality exists in other crypto-friendly jurisdictions.

Saeed Al-Marri, chief executive of Ethra, described tax neutrality as “table stakes.” Jack Yang, founder and CEO of LTP, said that a tax-neutral structure has limited practical value if it cannot meet the review standards of banks, custodians, auditors and regulators. Orest Gavryliak, chief legal officer at 1inch, pointed to predictable rules and institutional credibility as priorities for protocols.

Regulatory features include the Virtual Assets Service Providers Act introduced in 2023 and oversight by the BVI Financial Services Commission. Authorities aim to respond to VASP applications within about six weeks and to complete review within six months. The territory also offers relatively quick company formation, flexible corporate law and lighter ongoing reporting requirements than many onshore centres.

Companies using BVI entities generally keep staff and operations elsewhere. LTP’s BVI entity is overseen by its board and supported by staff in other locations. Kraken’s operational headquarters remain in the United States, and 1inch’s workforce is distributed across multiple jurisdictions.

BVI corporate rules keep beneficial ownership records with registered agents rather than a public register, which reduces public disclosure while firms remain subject to anti-money-laundering and know-your-customer requirements.

The figures cited are drawn from industry and jurisdictional data compiled through early June and reflect legal and corporate choices made by digital asset firms when incorporating entities for token issuance, treasury management and custody.