Explains the concept of regulation for custodians of asset-backed tokens

Custodians of asset-backed tokens need to be licensed to hold the asset. This license may vary based on the asset and geographical jurisdiction of the custodian. Custodians must also prove reserves regularly given that a lack of 1:1 backing would undermine the whole system. KYC and AML restrictions also apply to users engaging in asset-backed tokens. These restrictions need to be enforced at the time of purchase, redemption, or transfer of tokens.