Why Water?
BWBs – Tokenized FDA-Certified Spring Water
Tokenized Real-World Assets (RWAs) are an emerging asset class representing tokenized ownership of physical, off-chain assets such as real estate, commodities, and precious metals (e.g., PAXG). While stablecoins (such as USDT or USDC) are technically RWAs backed by fiat currency, they are often treated separately by convention—a distinction we believe is artificial and unnecessary. Both tokenized RWAs and stablecoins represent fractional ownership of tangible assets, whether commodities or fiat currency itself. Historically, fiat currency itself functioned as an RWA, anchored directly to commodities like gold.
Indeed, stablecoins and tokenized RWAs differ only in their underlying redeemable asset. For instance, USDT is redeemable for fiat dollars, whereas PAXG is redeemable for physical gold, yet structurally they remain fundamentally identical.
Due to this structural similarity, emerging U.S. legislation for stablecoins—such as the GENIUS Act (currently pending congressional approval after Senate passage)—is setting global precedents for compliance standards, including mandatory AML/KYC (Anti-Money Laundering/Know Your Customer) protocols and 100% reserve requirements. These standards are rapidly becoming industry-wide, increasing the attractiveness and trustworthiness of tokenized assets globally.
Such regulations give tokenized RWAs enhanced credibility, providing investors with powerful assurances akin to the highest standards set for stablecoins. Just as stablecoins must maintain full reserves guaranteeing fiat redemption, our Bearer Water Bonds (BWBs) guarantee direct redemption for the underlying physical commodity—spring water—because we own the source outright.
Introducing Bearer Water Bonds (BWBs)
A Bearer Water Bond (BWB) is a digital token representing direct ownership of 6,700 gallons of FDA-certified spring water, sourced from a fully permitted artesian well located in Pittsburg, New Hampshire. This site holds an active groundwater extraction permit issued by the New Hampshire Department of Environmental Services (NH DES).
Legal Structure and Delivery Process
Each BWB is classified legally as a physical-settlement-only commodity under U.S. regulation CFTC §1a(19). This classification is critical as it guarantees immediate physical redemption rights. Upon redemption, water is delivered directly into stainless steel tanker trailers—the industry standard for transporting potable liquids.
Who Uses BWBs?
BWBs are valuable both commercially (for water bottlers, municipal utilities, and futures traders) and privately (e.g., individuals filling potable swimming pools).
Rights of BWB Owners
There are no restrictions on who may redeem a BWB, nor limitations on lawful uses for delivered water. These rights are consistent with traditional warehouse receipt law in the United States.
Market Positioning and Competitive Advantage
Due to geographic proximity to well-known alternative spring water sources such as Poland Spring, BWBs uniquely combine real-world scarcity with digital efficiency. Unlike purely financial water futures (like the cash-settled CME NQH2O contract), BWBs provide physical settlement, enabling direct delivery of water for bottling or commercial applications. This model aligns with established CFTC-approved warehouse receipt standards used for other major commodities, such as natural gas (LNG) and gold.
Regulatory Strategy: Commodity, Not Security
Our primary regulatory objective is securing a CFTC No-Action Letter to confirm BWBs' status as commodities, explicitly excluding them from SEC oversight. The rationale is straightforward: BWBs are warehouse receipts for physical goods—not complex derivatives or futures contracts with expiration dates.
Conclusion: A Time-Tested Model, Modernized
The concept of warehouse receipts has a long-established legal history within U.S. commercial law, dating back to early commodity markets. By digitizing this traditional model via blockchain technology, BWBs modernize this established concept—offering secure, programmable digital assets with proven historical foundations.
Natural Spring Water: A Vanishing Commodity
Natural spring water has long been marketed as a symbol of purity—a product valued for its unique mineral content and its supposed freedom from human interference. However, this perception is increasingly at odds with a complex reality. The rarity and cost of genuinely natural spring water are rising, driven by a convergence of factors that include pervasive pollution, the systematic depletion of natural aquifers, and the immense expense required to protect the few clean sources that remain.
A primary driver of this crisis is pollution. Contaminants now threaten springs that were once considered pristine. Scientific studies have detected hundreds of microplastic particles—including PETE, LDPE, and PVC—in springs across the globe (Yanuar et al., 2023). Beyond plastics, these vital water sources are at constant risk of contamination from agricultural runoff, industrial waste, radioactive elements, and heavy metals, necessitating costly and continuous assessment and mitigation (Lavrentyeva et al., 2023), (Sajid et al., 2024).
Compounding the pollution problem is the simple fact of scarcity. Growing populations, intensive agricultural demand, and industrial-scale extraction have led to the overuse of ancient aquifers. As water tables drop, spring flows diminish, and many sources either dry up or become too contaminated for consumption without treatment (Pantha et al., 2022), (Perkins, 2024). Protecting the few clean springs left is now a costly endeavor, as ensuring the water meets stringent quality standards requires advanced monitoring and legal compliance that inevitably drive up the price (Mwami, 1995), (Kremer et al., 2009).
The convergence of pollution and scarcity culminated dramatically in a recent scandal in France, where a Senate inquiry that began making headlines in 2024 uncovered Nestlé’s covert use of prohibited carbon and ultraviolet treatments on brands marketed explicitly as "natural mineral water," such as Perrier and Vittel—practices explicitly banned by EU law (AP News, 2025), (JURIST, 2025). The scandal resulted in a €2 million fine, with fraud estimates exceeding €3 billion. Further compounding public outrage, Nestlé was forced to destroy two million bottles of Perrier contaminated with harmful bacteria, underscoring the vulnerabilities of supposedly pure sources (Le Monde, 2025).
The romanticized image of pristine spring water is fading rapidly. As awareness of contamination and aquifer depletion grows, consumers' willingness to pay premium prices for authentic natural water rises, even as genuine sources diminish. This clash of increased demand against shrinking supplies underscores a critical shift: spring water has become a scarce, high-value commodity, with the label "natural" increasingly difficult and costly to guarantee (Sindhi & Choudhury, 2018).
The Unique Position of Natural Spring Water in the Market
To understand the modern market for natural spring water, we must clarify its unique position relative to its many substitutes. From a functional perspective, consumers can turn to alternatives like filtered tap water, desalinated water, or even highly specialized products such as deuterium-depleted water (DDW), which is exceptionally expensive due to its multi-stage distillation process.
However, these substitutes are fundamentally different products in the eyes of both regulators and consumers. The key distinction lies in the rigorous framework established not only by European regulators, but also by the U.S. Food and Drug Administration (FDA). For a beverage to be legally sold as "natural spring water," it must adhere to the FDA's specific "Standard of Identity." This regulation mandates that the water originates from a protected underground source and is collected directly at the spring or an interconnected borehole, ensuring its natural composition remains unaltered.
This regulatory oversight, which certifies the water's origin and purity, creates a clear market separation. Consequently, it is an established fact—not a forward-looking hypothesis—that FDA-compliant spring water commands a significant price premium over products like filtered tap water.
Scarcity: Economics and Future Outlook
Unlike economic indicators such as real per-capita GDP, which historically grows at roughly 1.5% annually in stable economies like the United States, the availability of natural spring water follows a reverse trajectory. Due to relentless pressures of source depletion, pollution, and population growth, this finite resource is steadily shrinking on a per-capita basis.
While no single official figure quantifies this annual decline, an evidence-based estimate is possible. By considering known rates of groundwater depletion and population growth, it is reasonable to conclude that the per-capita supply of natural spring water is indeed declining each year—likely in the low single-digit percentages (e.g., 1–3%) in developed countries like the U.S., and even faster in regions facing severe water stress (Perkins, 2024).
Spring Water Bonds: An Economic Analogy
It is a foundational principle of modern finance—advanced by authorities from William Sharpe and John Bogle to Warren Buffett—that the broad market portfolio offers the lowest possible diversifiable risk. The reasoning is fundamental: since the ultimate purpose of investment is to secure a claim on future consumption, and an economy's real GDP represents the entire pool of goods and services available to be consumed, the market portfolio is the most direct claim on that output.
By owning the market portfolio, an investor acquires a proportional claim on the collective output produced by the economy's major firms. In this sense, holding the market is the most direct way to invest in the productive capacity of the real economy, making it an effective proxy for GDP itself.
This is why fixed-income instruments—being a subset of the overall market portfolio (which includes all claims on economic output, not only stocks but also bonds, as per Sharpe and Modigliani & Miller)—are inherently riskier, owing to inflation, default, and bank-run risks. However, consider bonds whose coupon payments are not denominated in fiat, or even commodity money, but in natural spring water. How risky would such fixed-income instruments be?
Of course, there is always the risk that the issuer will default on the coupon payments (e.g., the spring becomes contaminated or dries up). Then there is price risk in the wholesale market for natural spring water: future coupon payments made in spring water would be exchanged for fiat money (akin to the wholesale spring water market that already exists). Like other commodities, future natural spring water prices are unpredictable, as are prices of irrigation water sold at the source—exemplified by the cash-settled CME NQH2O contract.
Suppose Mountain Valley Spring, bottling water since 1871, decided to issue bonds denominated directly in natural spring water, delivered at the source. Though these bonds would technically grant holders the right to physical delivery of water, investors—similar to holders of stablecoins like USDT—would likely never physically redeem them. Instead, they'd trade the digital claim itself, benefiting from the commodity's perceived scarcity and value without the logistical burdens of actual delivery.
Let us set aside idiosyncratic issuer risk and focus on the nature of the asset itself. What remains is a financial instrument whose payments are denominated in an inflation-proof, life-essential commodity. This commodity's available per-capita supply is shrinking, placing it on a reverse trajectory to the economy's overall output, which grows. This dynamic implies a near-certain increase in relative scarcity, which in turn suggests a durable increase in purchasing power relative to the basket of goods that constitutes GDP.
The conclusion is therefore profound. An instrument backed by a diversified portfolio of such springs presents a strong case for outperforming an S&P 500 proxy on a real, inflation-adjusted basis. While not a 'risk-free' asset in the technical sense, the 'Spring Water Bond' presents a unique risk profile. Its value is anchored to a life-essential commodity with a steadily diminishing per-capita supply. The ultimate measure of risk for any investment is the probability of a loss of purchasing power. When evaluated by this metric, it is reasonable to conclude that a diversified portfolio of this nature has a lower probability of delivering a negative real return in any given year than a broad equity index like the S&P 500. It therefore functions not as a replacement for the risk-free rate, but as a powerful defensive asset and a superior long-term store of value.