Tokenizing real-world assets: The future of Blockchain in Dubai

Category: Events GCC NTFs
Posted by Katy

In an engaging discussion at the AIBC Eurasia conference, Scott Teal, founder of 6IX and a seasoned expert in blockchain technology, along with Mohammed J Sear, the Digital Government & Public Sector Consulting Leader. EY Africa, India, Middle East, shared insights into the world of tokenization. Focusing on the transformative power of blockchain in creating new avenues for investment, they highlighted the significant regulatory developments in Dubai that make it an emerging hub for blockchain innovation.

Tokenization Defined

Tokenization –  the process of converting real-world assets, such as real estate or art, into a digital form that can be sold, traded, fractionalized, collateralized, and more. This broad definition encapsulates the essence of blockchain technology—taking anything and placing it in a new digital form.

The Value in Tokenization

The value of tokenization, particularly in providing access to capital for asset owners was also discussed. Traditional methods, such as mortgages, have limitations, making it challenging for many to participate. However, through tokenization, asset owners can create new ways of accessing capital by allowing individuals to own fractional pieces of assets, opening up opportunities for both asset owners and investors.

Real-world Applications

Illustrating the concept,  examples of tokenizing high-value art pieces and real estate were shared. By fractionalizing these assets, individuals can own a piece of iconic structures like the Burj Khalifa, enabling exposure to operating profits and capital appreciation. This democratization of access to assets, combined with regulatory advancements, creates a hybrid approach that bridges traditional finance with cutting-edge technology.

“I’m a futurist. I love contemplating how tomorrow is going to be better than today. In the confluence of DLT tech – how can we use this in a way that actually makes a meaningful difference in the way society operates?” asks Scott Thiel.

He goes on to say, “The real potential of this tech is to fundamentally change the way the financial systems work – which are very exclusive. To democratize finance on both sides of the ledger – whether its asset owners or asset issuers. The traditional financial ecosystem only services a very small part of the community.”

Regulatory Framework in Dubai

Also highlighted was the importance of regulatory frameworks, particularly in Dubai, as a catalyst for the growth of the tokenization space. The emergence of Vara as a new regulator, unencumbered by traditional financial service regulations, has allowed for experimentation and iteration. Every virtual asset, including cryptocurrencies, digital art NFTs, and utility tokens, falls under the same definition of a virtual asset, providing clarity and certainty for market participants.

“I’m really passionate about making a difference in people’s lives. One policy, one change in regulation, can make a huge difference in the experience and lifestyle of an individual,” opines Mohammed J. Sear.

Advice for Individuals

As the conversation concluded,  advice for individuals looking to enter the tokenization space was put forward – emphasizing the significance of understanding the regulatory landscape and encouraged individuals to explore opportunities in a market where experimentation is welcomed.

These insights shed light on the transformative potential of tokenization and the unique position Dubai holds in fostering blockchain innovation. The intersection of regulatory advancements, diverse asset tokenization, and increased accessibility presents a compelling landscape for individuals and investors alike to explore the evolving world of blockchain technology.

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