The rise of blockchain technology in the past decade has created a revolution in capital mobilization methods, converting from the primitive ICO (Initial Coin Offering) model to the strictly regulated STO (Security Token Offering) model. However, according to Tan Phat Digital's observations, when it comes to the question of whether all governments are really open to STOs, reality shows an extremely complicated picture. The world is currently divided into blocs with distinct approaches, from pioneer countries to regions that maintain strict bans to protect monetary sovereignty.
Evolution from ICO to STO: Economic nature and management thinking
To understand the attitude of governments, it is necessary to see STO not just as a technological tool but as a transformation of the economic nature of digital assets. The period 2017-2018 witnessed an explosion of ICOs but was also accompanied by countless scams. STO appears as a disciplined solution, combining the efficiency of blockchain with the legal framework of the traditional stock market.
The core difference lies in the escrow mechanism. While ICOs issue utility tokens that typically have no intrinsic value, STOs issue tokens that represent ownership of shares, debt, or real assets such as real estate. Governments are more open to STOs because they bring transparency through information disclosure and financial reporting requirements - the gold standards of global finance.
Detailed comparison of operating characteristics: ICO and STO
Below is a detailed analysis table from the Tan Phat Digital team to help you easily compare the two models this:
Nature of the token: ICOs are usually Utility Tokens (no ownership); STO is Security Token (representing real assets such as stocks, gold, real estate).
Legal regulations: ICOs operate in a gray area, with little supervision; STO strictly complies with applicable securities laws.
Investor rights: ICO has very limited rights; STO provides the right to receive dividends, vote and own tangible assets.
Essership mechanism: ICO is based on trust in the project; STO is backed by actual asset value.
Level of transparency: ICO is often low, information lacks verification; STOs require periodic financial reporting and legal due diligence.
Investor target: ICO is open to the general public; STOs are often aimed at professional or accredited investors.
Sustainability: ICOs have the risk of extreme price fluctuations; STOs are more stable and have the ability to integrate deeply into the traditional financial system.
Research shows that governments favor STOs because they help "democratize" access to illiquid assets. However, this openness comes with high compliance costs, causing STOs to become professionalized and target large organizations.
United States: Shift to "Digital Infrastructure Creation"
The United States is a typical example of the change in government attitude in the period 2024-2026. Under the leadership of the SEC, the country has moved from a hostile stance to a clear regulatory framework aimed at maintaining its status as a global financial center.
In early 2025, the SEC launched a Crypto Task Force to determine the securities status of digital assets. The biggest turning point occurred in December 2025 when the SEC allowed the Securities Depository and Clearing Company (DTC) to pilot asset tokenization for 3 years. This allows for the transfer of tokenized securities on the blockchain, marking the official integration of distributed ledgers (DLT) into the US core infrastructure.
SEC Roadmap for Reform in 2025
January 21, 2025: Establishes a Crypto Task Force dedicated to asset management No.
January 23, 2025: Cancel SAB Guidance 122, allowing banks not to recognize customers' crypto assets as debt.
February 27, 2025: Dismiss Coinbase lawsuit, shift from enforcement management to clear policy development transparency.
April 4, 2025: Issue guidance on Stablecoins to clarify factors that determine securities.
September 8, 2025: Nasdaq proposes tokenization trading rules, aiming to bring securities tokens to a centralized exchange.
December 11, 2025: 3-year DTC pilot license, formalizing tokenization in the custody system.
Tan Phat Digital finds that the US is using uses the "Howey Shield Framework" to clearly differentiate between entertainment tokens and true securities. Nasdaq expects to begin the first token settlement transactions around the third quarter of 2026.
The European Union and the "Same Risks, Same Rules" Strategy
In Europe, STOs are managed via a tiered structure. MiCA brings unity to virtual currencies but excludes security tokens (Security Tokens). The reason is the principle of technological neutrality: if an asset represents an equity interest, it is subject to MiFID II and the Prospectus Regulation.
Analysis of the EU regulatory framework for digital assets
Security Tokens (Security Tokens): Subject to MiFID II. Requires a full prospectus, investment license and strict corporate governance.
E-Money Tokens (EMT): Subject to regulation by MiCA. Requires backing in a fiat currency and strict AML compliance.
Asset-referenced Tokens (ART): Subject to MiCA regulation. Backed by a basket of assets and must notify the regulator in advance.
Utility Tokens: Subject to regulation by MiCA. Require transparent Whitepaper and withdrawal rights for retail investors.
The EU's openness is also demonstrated through the "DLT Pilot Regime", where corporations such as Siemens and the European Investment Bank (EIB) have issued digital bonds worth hundreds of millions of Euros. According to analysis by Tan Phat Digital, the application of the ERC-3643 standard is becoming a technology solution to help harmonize cross-border legal requirements in this region.
Vietnam: A cautious 5-year Pilot Program
In the Southeast Asia region, Vietnam took a historic step forward in September 2025 with Resolution No. 05/2025/NQ-CP. This is the first time Vietnam has established a 5-year pilot program (sandbox) for the virtual asset market.
This openness is strategic but highly controlled. The government focuses only on virtual assets backed by real assets, excluding traditional securities and fiat currencies from the scope of encryption. A special point that Tan Phat Digital notes is that Vietnam only allows domestic enterprises to issue and only offer to foreign investors to attract foreign currency.
Strict conditions for operating units in Vietnam
Charter capital: Enterprises operating the exchange must have a minimum capital of 10,000 billion VND (about 380 million USD).
Ownership: At least 65% of capital must be held by organizations, of which at least 35% is from reputable financial institutions (banks, securities companies).
Foreign exchange: Foreign investors are required to open a dedicated VND account at a Vietnamese bank for trading translation.
Data storage: All transaction data must be stored on servers in Vietnam for 10 years.
Singapore and UAE: Management Model as Infrastructure
Singapore and UAE maintain their global leadership position by considering legal security as infrastructure to attract investment. MAS (Singapore) focuses on technology risk and data governance (TRM), requiring boards to have deep knowledge of cybersecurity. Meanwhile, the UAE has finalized a unified federal framework for security tokens by 2025, turning the country into a new "crypto superpower".
Ranking the top countries for STO regulation in 2025
UAE: Prioritizing speed of enforcement and centralized federal regulatory framework.
Switzerland Si: Based on a legacy of trust and the first DLT trading license.
Singapore: Balanced innovation and strong risk management infrastructure.
Hong Kong: Promotes competition through Stablecoin legislation and VATP guidance.
United States: Aggressive reform of existing infrastructure through DTC and Nasdaq pilots.
Strategic Rivalry: Barriers from China
Even though STO is a global trend, China still maintains a "zero tolerance" policy on raising capital in private virtual currencies to protect financial stability. However, they allowed Hong Kong to experiment with Web3 policies and asset tokenization as a "safety valve" to connect with international capital flows without affecting the mainland financial system.
The Role of International Organizations
FATF and IOSCO play the "helmsman" role, ensuring STOs do not create vulnerabilities for criminals. FATF has pushed for the "Travel Rule" to become a mandatory standard. IOSCO also finalizes recommendations on digital asset markets (CDA) by the end of 2025, focusing on market integrity.
2025 Global Regulatory Framework Pillar
FATF: Anti-money laundering, issuance of virtual asset recovery guidance and promotion of the Travel Rule.
IOSCO: Home protection investment, conducts assessments in 20 countries on market integrity.
FSB: Financial stability, makes recommendations for global stablecoins.
Basel Committee: Manages banking risks and reviews capital buffer rules for crypto.
Case Studies 2025-2026
Tan Phat Digital has compiled the most successful cases that demonstrate the potential of STO:
BlackRock BUIDL (Tokenized Money Market Fund): By January 2026, BlackRock's BUIDL fund had exceeded the milestone of 2.3 billion USD in assets under management. This fund has distributed more than 100 million USD in dividends directly on the Ethereum blockchain and expanded to networks such as Solana and Avalanche. BUIDL helps solve operational problems such as T+0 settlement and 24/7 liquidity.
Siemens Digital Bond: Siemens Group successfully issued a digital bond worth 100 million Euros under German eWpG law, proving that large enterprises can raise debt entirely on the blockchain while still ensuring the highest legal security.
2026, allowing investors to choose to pay via traditional or blockchain systems.
Frequently Asked Questions (FAQ)
Below are answers from Tan Phat Digital experts on common issues:
Are STOs really safer than ICOs? Yes. STO is safer because it is required to comply with securities laws, has supervision by regulatory agencies (such as SEC or MoF) and most importantly is backed by real assets (real estate, company shares).
What benefits do investors receive when buying Security Tokens? Depending on the type of token, investors can receive dividends, voting rights, or revenue sharing rights similar to owning traditional stocks or bonds.
Why is the ERC-3643 standard important for STOs? This is a token standard that counts "on-chain identity" functionality. It ensures that only users who have passed KYC/AML verification can trade, helping issuers comply with the law automatically even on public blockchains.
Can individuals in Vietnam participate in STOs? According to Resolution 05/2025/NQ-CP, Vietnam currently only allows the offering of virtual assets to foreign investors through licensed exchanges to collect attract foreign capital and test safety.
Challenges and Future Vision
Despite progress, STO adoption still faces barriers from the "Adoption Gap" where large institutions do not fully trust the custody infrastructure. However, with large funds like BlackRock BUIDL reaching the milestone of more than $2.3 billion in assets under management in January 2026, confidence is gradually being strengthened.
Tan Phat Digital concluded that: The picture of STO management in 2026 is no longer "Forbidden". or not ban" but "How to manage to optimize benefits". Successful countries will be those who build infrastructure that seamlessly connects blockchain and the traditional banking system, making asset encryption the new standard of the modern financial market.
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