What is an SPV?
A Special Purpose Vehicle (SPV) is a subsidiary company with its own legal status, created to isolate financial risk. In RWA tokenization, SPVs hold the underlying assets separately from the issuer.
Why Use SPVs for Tokenization?
- Bankruptcy protection: Assets protected if parent company fails
- Legal clarity: Clear ownership structure for token holders
- Regulatory compliance: Easier to meet securities regulations
- Risk isolation: Limits liability exposure
SPV Structure in RWAs
Typically: Real Asset -> SPV (holds asset) -> Tokens (represent SPV ownership) -> Investors