reference: VARA Virtual Asset Issuance Rulebook (Annex 2) – page 40-51 VARA_EN_293_VER20250519
Disclaimer: This article represents the views of the author alone and is intended for informational purposes only. The content should not be construed as legal, regulatory, or financial advice. Any reliance placed on the information herein is strictly at the reader’s own risk.
Short answer: It depends on what the “token-as-proof-of-contract” represents.
A token is only classified as an ARVA if it references value, ownership, income, or real-world assets.
Below is the detailed breakdown.
✅ When a “token-as-proof-of-contract” IS an ARVA
If the token represents any economic right arising from the contract, including:
✔ Ownership or partial ownership of something
(e.g., rights to an asset, entitlement to property)
✔ A right to receive payments, revenues, or future income
(e.g., token holder receives cashflows from the contract)
✔ A direct claim on a real-world asset
(e.g., inventory, land, financial instrument)
✔ Any value backed by off-chain assets
(e.g., contract obligates redemption, collateralization, guarantee)
✔ A securitized, fractionalized or wrapped version of contractual rights
Then it falls squarely under the ARVA definition, which includes tokens that:
- “represent…ownership of an RWA”
- “represent entitlement to receive Income”
- “represent value derived from or backed by an RWA”
- “are fractionalised, wrapped, or securitised versions of another ARVA”
(All from Schedule 2)
➡ In these cases, your token-as-proof-of-contract = ARVA → Category 1 VA Issuance → full VARA licensing required.
❌ When a “token-as-proof-of-contract” is NOT an ARVA
If the token does not represent or imply any financial, ownership, or value rights, and its purpose is purely informational, it is not an ARVA.
Examples that are NOT ARVAs:
✔ A token that merely confirms existence of a contract
✔ A token that acts as metadata or a digital certificate
✔ A token that is non-transferable and does not carry value
✔ A token used as proof-of-attendance, proof-of-agreement, proof-of-identity
✔ A token that cannot be redeemed nor traded
✔ A token that does not relate to an asset, revenue, or claim
These may fall under:
- Exempt VA – Non-Transferable VA
If the token cannot be transferred and has no value function
(“cannot be converted, exchanged, redeemed, or transferred”) - OR simply outside the VA regime entirely.
➡ In these cases: token-as-proof-of-contract ≠ ARVA.
🧭 Decision Tree (Simple Test)
Does the token give ANY rights to an asset, value, or income?
- Yes → ARVA
- No → Go to next question
Is the token transferable or tradeable?
- Yes → Could still be a Virtual Asset, but not an ARVA; may fall into Category 2
- No → Likely an Exempt Non-Transferable VA
Is it purely proof/record/identity metadata?
- Yes → Not an ARVA
- No → Evaluate underlying rights carefully
🧩 Practical Examples
Example 1 — Token proofs you signed a rental contract
- No income rights
- No ownership
- No asset claim
➡ Not ARVA (likely a non-transferable VA or outside VA rules)
Example 2 — Token proofs you have access rights (e.g., ticket or service access)
- No asset/value claim
➡ Not ARVA (could be Category 2 or Exempt VA depending on transferability)
🔎 Final Consideration
A “token-as-proof-of-contract” is NOT automatically an ARVA.
It becomes an ARVA only if the contract represented by the token involves rights to assets, income, or value.
If it is purely proof, non-transferable, and carries no economic rights, it is not an ARVA.
