A proposal to buy and tokenise physical copper using 22 million ADA from the Cardano treasury has been engulfed in controversy over alleged constitutional violations. With voting nearing its close, objections over governance suitability have emerged, leaving approval uncertain.

Decrypto, a blockchain media outlet, reported on Oct. 28 that the agenda item had drawn attention as a test case for Cardano's tokenisation strategy for real-world assets (RWA). It said constitutional compliance and the creation of an oversight framework have become key issues before funds are disbursed.

The proposal is Toto Finance's "Cardano Strategic Copper Reserve," submitted on Oct. 15. The core plan is to make a one-time withdrawal of 22 million ADA from the Cardano treasury to purchase copper cathodes and issue an on-chain token, "CuTT," backed by the copper. About two-thirds of the requested funds would be used to secure high-grade copper, which would be stored in approved domestic warehouses. The design links 1 CuTT to 1 pound of verified copper.

Under the plan, Toto Finance would hold the copper for up to 2 years and then sell it in a controlled manner. Net profit and unused funds must be returned to the treasury within 36 months. Recovery of the principal in ADA or the realisation of profits is not guaranteed. The proposal set a breakeven copper price of $10.06 per pound if all fee caps apply, and an illustrative purchase price of $6.73.

The proposal ran into difficulty starting with the constitutional suitability review. Two members of Cardano's constitutional committee cast votes against it on Oct. 22 and Oct. 23. They took issue with the proposal document being posted on the proposer's website. They said governance documents submitted must remain immutable, but while cryptographic hashes can indicate whether a document has changed, they do not prevent a website operator from replacing the document itself.

The delegation structure of the receiving account also became an issue. The account is delegated both to a stake pool and to an "abstain" option, and constitutional committee members judged that structure as not compliant with the constitution. One member also pointed to Toto Finance being designated as the sole administrator. The member said an oversight mechanism to independently review fund disbursement has not yet been finalised.

Approval requires at least two-thirds of the constitutional committee to determine the proposal is constitutional. So far, 5 committee members have not voted. Opposition is also leading in voting by delegated representatives (DReps). As of the latest tally, 32.8 percent opposed it and 0.32 percent supported it, while 66.87 percent had not voted. Voting runs until Nov. 15, 2026, leaving room for the outcome to change.

Fund management and the post-disbursement oversight framework also remain to be resolved. Toto Finance identified a U.S. PwC member firm as a priority partner for independent oversight, but a contract has not been signed. A "Liv report" layer within the Cardano Foundation also remains at the proposal stage. Audit obligations and a security review of the Ethereum-Cardano bridge have not yet been completed.

The token issuance structure also carries additional burdens for verification and security. CuTT created using treasury funds would be locked in an Ethereum escrow, while a corresponding bridge token would be issued on Cardano. Procedures are required to verify the storage and quantity of the physical copper and confirm that on-chain tokens match the real asset. A proposal can be submitted before all related contracts are signed, but progress must be disclosed.

Toto Finance's chief executive officer plans to discuss the agenda item with the Cardano Foundation's head of governance at "Cardano Governance Hour #12" held on Oct. 28.

The proposal is expected to be a test of whether Cardano, which is pushing to expand tokenisation of real-world assets, can also put in place constitutional safeguards and a transparent fund management system. Cardano founder Charles Hoskinson has emphasised tokenisation of real-world assets as a key driver of growth for the cryptocurrency industry over the next 5 years. The Cardano Foundation has also participated in related initiatives with London Stock Exchange Group, MembersCap and Akakx.

The copper reserve proposal, however, is showing that it must prove not only the potential of tokenisation projects but also constitutional compliance, independent oversight and an asset verification system.