Tokenizing royalties is not the same as issuing an NFT. The question that determines the regime is what the buyer receives: if they acquire a right to participate in future income managed by a third party, we are normally dealing with a transferable security, with all its regulation. If they acquire a unique piece without that expectation, no.
You have intellectual property rights that generate income. A song that collects royalties every quarter. An audiovisual catalogue with licences. A patent that pays royalties. And someone has told you to “tokenize” them or issue an NFT with them. The underlying question is not technical. It is this: does the token give its buyer a right to a share of your future income? If the answer is yes, you are not making a collectible. You are issuing something that looks a lot like a security. And that changes who supervises you, what paperwork you need and how much it costs.
This guide separates two things that marketing deliberately mixes: the speculative NFT and the token that distributes income. The boundary is not set by the format. It is set by the economic right.
If the token distributes your future royalties, it is a security token under the LMVSI, not an NFT
A token that grants the right to participate in the future income or royalties from your IP is an economic right over cash flows. That brings it close to a financial instrument, a regulated financial product, and turns it into a transferable security. Regime: LMVSI (Ley del Mercado de Valores e Instrumentos de Inversión, Ley 6/2023), MiFID II, CNMV supervision, and registration in an ERIR (the «digital notary» where who holds each token is recorded). It falls outside MiCA, which excludes financial instruments (art. 2(4) MiCA; art. 8 LMVSI).
A genuinely unique and collectible NFT, which does not grant the right to cash flows, is not a security token. It falls outside due to the exclusion for unique and non-fungible assets (art. 2.3 MiCA). The problem starts when the NFT, even if it is called «collectible», promises a distribution of royalties. Then the name does not matter. What it delivers matters.
What it means for you: before choosing a tool or chain, decide what the token delivers. If it delivers a part of your income, you go the regulated route. If it delivers only a unique piece with no right to payment, you go another route. Confusing them exposes you to selling a security without the documentation required by the CNMV.
What tokenizing royalties is (and what it is not)
Tokenizing royalties means representing in a token the right to receive a part of the income produced by an intellectual property right. It is not selling the song. It is not transferring the patent. It is splitting the cash flow that those rights generate and letting another person buy a part of that flow.
The token is the receipt, not the source of the right
The token does not create the right to payment. It represents it. The right is born from a contract: an assignment of royalties, an income-sharing agreement, a participation in a company that collects the royalties. The token is the evidence that you have that share, just as a ticket is the evidence that you have paid for the concert. If the contract does not exist or is poorly drafted, the token is worth nothing on its own.
Why a right to future income looks like a security
When someone pays you today in exchange for receiving a part of your income tomorrow, they are investing. They expect a return that depends on the work of another: you, the catalog, the exploitation of the IP. That structure (money now, future return you do not control) is the mark of a financial instrument. The law looks at substance, not the commercial label (art. 4 MiFID II). That is why a «royalties NFT» falls on the securities side even if it lives on the same chain as a collectible.
What it means for you: if you are going to sell participations in your income to several people, assume from day one that you are in securities territory. First read security token vs utility token to confirm which side you fall on.
Royalty token (security) vs NFT: what separates them
The difference is not in the image or the technical standard. It is in whether the buyer acquires the right to payment.
| Dimension | Royalty token (security) | Collectible NFT |
|---|---|---|
| What it delivers | Part of future income/royalties | Unique piece, no right to cash flows |
| Legal nature | Financial instrument / transferable security | Unique digital asset (outside securities) |
| Regime | LMVSI + MiFID II + Prospectuses + ERIR | Outside MiCA if genuinely unique (art. 2.3) |
| Supervisor | CNMV | No securities supervisor |
| Sales document | Prospectus or issuance document | Does not require a prospectus |
| Register of holders | ERIR (digital notary of the registry) | Does not require ERIR |
| Advertising | Securities rules (art. 246 LMVSI) | General consumer rules |
What it means for you: if your “NFT” fits in the left column for a single row (it distributes income), the entire left regime applies to you. You cannot take the collectible image and the collectible paperwork if the right is that of a security.
The underlying IP right follows its own rules.
Tokenizing income does not affect intellectual property itself. They are two distinct planes, and it is best not to mix them.
Two layers: the IP and the income it produces
The song, the film, the patent or the trademark continue to be governed by their intellectual and industrial property regulations. Who the author is, how long the rights last, how they are licensed: that does not change because there is a token. What you tokenize is the upper layer, the economic right to collect what that IP generates. The medium where you record who gets paid changes. The underlying right does not.
You must be able to assign the income, not just the IP
For the token to represent something real, the contract must be able to transfer that share of the income. If your agreement with the publisher, the production company or the collecting society prevents assigning the royalties to third parties, the token cannot deliver what it promises. Check first what you can assign and to whom. The technical transferability of the token does not create legal transferability of the right.
What it means for you: review your exploitation contracts before promising revenue sharing. A token that distributes income you cannot assign is a sale without delivery.
The pieces you will need
If the token distributes income, there is a minimum structure you cannot skip.
The vehicle: S.A. or SPV, not S.L. for equity
If the participation in income is structured as share capital of a company, an S.L. does not work: the law prohibits representing interests in a limited liability company as a transferable security (art. 92.2 LSC). The route is an S.A. or an SPV (a dedicated vehicle, created solely to hold that right) or a debt structure that pays according to the income. The chosen form defines the rest of the paperwork.
The issuance document and the registry
Selling the token to the public obliges you to provide a document describing what the investor is buying and what risks they assume (prospectus or issuance document, depending on the case and the thresholds). And ownership is registered in an ERIR, the entity responsible for the book-entry registry (art. 8 LMVSI; RD 814/2023). As of 2026, the first ERIR authorized by the CNMV is Ursus-3 Capital.
Advertising and money laundering
If you promote the sale, you enter the securities advertising rules (art. 246 LMVSI). And since you move investor money, anti-money laundering obligations apply to you: identifying who buys. They are not optional procedures. They are part of the real cost of issuing.
What it means for you: the cost and time are not in programming the token. They are in the vehicle, the document and the registry. For process details, see how to issue a security token in Spain.
What to do now
- Decide what the token delivers. If it distributes income or future royalties, assume the securities route. Confirm the side with security token vs utility token.
- Check whether you can assign that income. Look at your exploitation contracts before promising distribution to third parties.
- Understand the general framework before choosing a vehicle. Start with what asset tokenization is.
- If you are going the security token route, follow the process in how to issue a security token in Spain.
- Clear up any acronyms you are not familiar with in the glossary.
Frequently asked questions
Does tokenizing royalties turn my NFT into a security token?
If the token gives the right to receive a portion of your future income, yes: that economic right over cash flows brings it close to a financial instrument and subjects it to the LMVSI, MiFID II and CNMV (art. 8 LMVSI; art. 4 MiFID II). The name «NFT» does not change the nature of the right.
Does a collectible NFT of my work fall under securities regulation?
No, if it is genuinely unique and does not grant rights to cash flows. European crypto-asset regulation excludes unique and non-fungible assets (art. 2.3 MiCA). The problem appears only when that NFT promises revenue sharing.
Does tokenizing my royalties transfer my intellectual property?
No. IP follows its own rules. You tokenize the layer above, the right to collect what the work generates, not ownership of the work. They are two different levels and are managed separately.
Can I use an SL to distribute royalties as an equity interest?
Not for equity. The law prohibits representing shares of an SL as transferable securities (art. 92.2 LSC). The route is an SA, a dedicated SPV, or a debt structure that pays based on income.
Who supervises me if I tokenize royalties as an economic right?
The CNMV, because the token falls under the securities and financial instruments regime (LMVSI, MiFID II). It falls outside MiCA, which excludes financial instruments (art. 2(4) MiCA).
What if my case does not clearly fit either of the two?
It is a gray area. Do not improvise or choose the most convenient label. First define what the token delivers and what your contracts say, and verify the current version of the rules before selling anything.
Notice
Informational content. It does not constitute legal, tax or investment advice. HokenFi is a software and infrastructure provider; it does not provide regulated services. Verify the current version of the cited rules at BOE and EUR-Lex.
Cited regulations
- LMVSI: Ley 6/2023, del Mercado de Valores y de los Servicios de Inversión (BOE-A-2023-7053), art. 8 (ERIR), art. 246 (advertising).
- MiFID II: Directive 2014/65/EU (CELEX 32014L0065), art. 4 (definition of financial instrument), Annex I section C.
- MiCA: Regulation (EU) 2023/1114 (CELEX 32023R1114), art. 2(4) (exclusion of financial instruments), art. 2.3 (exclusion of unique and non-fungible assets).
- Real Decreto 814/2023 (BOE-A-2023-22764): regime for ERIRs.
- LSC: RDL 1/2010 (BOE-A-2010-10544), art. 92.2 (prohibition on representing shares of an SL as transferable securities).
- Prospectus Regulation (EU) 2017/1129: offering documentation and threshold exemptions.
