IMF, JPMorgan, Central Banks Contribute to Global Tokenized Asset Compliance Effort
A consortium of central banks, international financial institutions, and blockchain firms has contributed to the Global Layer One (GL1) white paper on programmable compliance, which outlines a compliance architecture for tokenized financial assets and regulated digital-asset transactions.
Contributors to the paper include Banque de France, the International Monetary Fund (IMF), Kinexys by J.P. Morgan, the Monetary Authority of Singapore (MAS), Standard Chartered, Bermuda (a privacy protocol for regulated digital assets), the BIS Innovation Hub, Chainlink Labs, and GLEIF.
The paper examines how compliance controls can be embedded directly into tokenized asset transactions. Programmable controls can enforce issuer-defined and regulatory policies, while privacy-focused technologies may support oversight without exposing sensitive transaction details.
Bermuda, whose contribution focuses on privacy-preserving compliance tools, noted that full public-chain transparency is often incompatible with commercial confidentiality. The company stated: “Every transaction can expose counterparties, amounts, and asset types. But the alternative, full opacity, can leave issuers and regulators with blunt enforcement tools.” It added that when action is required, the only available lever may be to freeze an entire pool, affecting compliant funds alongside illicit activity.
The GL1 paper outlines an architecture intended to balance regulatory oversight with commercial confidentiality. It explores how tools such as zero-knowledge proofs can support regulatory requirements without exposing sensitive data.
Jan Philipp Fritsche, co-founder of Bermuda and former European Central Bank official, said: “Enforcement needs precision. Recent incidents have shown what happens when precision is missing: issuers can be forced into blunt measures that risk freezing an entire protocol and the compliant users inside it.”
Fritsche argued that the digital asset industry needs compliance tools that can distinguish high-risk activity from legitimate transactions. Privacy-preserving technologies and compliance enforcement can work together, allowing issuers to apply targeted restrictions without affecting compliant participants.
The framework represents a growing institutional effort to integrate compliance into tokenized asset markets, which have seen significant growth with tokenized real-world assets reaching over $31 billion in onchain value.