Tokenised assets are being called a $16 trillion opportunity. But according to my next guest, most crypto projects are tokenising the asset and forgetting everything that actually makes it investable. Joining me is Abdul Rafay Gadit, Co-Founder of ZIGChain. Abdul Rafay, welcome to Wall Street to Mena.
Thank you very much.
Most projects mint the token and forget what is underneath it. What is actually missing?
If you look at tokenisation, it is a four-sided problem. It starts from origination — identifying the asset and where the yield is coming from. You couple it with technology and regulation. And in the end it comes down to distribution. The biggest problem we see is that most institutions think it is a technological problem. It is not. The technology has become commoditised — anyone can tokenise anything. What really matters is the regulatory angles underneath it, where the assets are coming from, and where you are going to distribute it.
You have got Apex Group on board — $3.4 trillion in assets. What does closing a deal like that actually look like?
Apex is a perfect example of a very large institution coming early into a new age technology. Peter and Cristiano at Apex — when you talk to them, they truly see that the fund administration and fund management business, which is a multi-trillion dollar industry, is going to be revolutionised. Their leadership is what makes these things happen with a smaller player like us.
You are tokenising UAE SME loans through Beehive. What does that mean for a small business here?
One of the things the UAE wants to do is that people should not just see the UAE as a place to come and raise capital — the SMEs here should have access to global capital. SMEs in the US can borrow at lower rates with much more abundance available. By tokenising the SME credit here with Beehive, we are giving UAE businesses an opportunity to attract global capital as FDI coming into this country. By bringing FDI, you are contributing directly to the SME sector.
You have been talking about Sharia-compliant finance on-chain. Why is this the market that will actually benefit from tokenisation?
At the base of tokenisation, it is called real world asset tokenisation. And the whole Sharia finance concept is built on the underlying being real — no synthetics, no derivatives, nothing like that. It has to be real. And this is the core of Sharia compliance. I believe tokenisation can be the biggest use case for Sharia compliance. The Muslim population is the fastest growing and youngest population in the world, tech-enabled, emerging markets are bubbling up with Muslim population. Combine all of this and you have tokenisation as the largest use case.
What is the one thing standing between tokenisation today and that $16 trillion number?
In my honest opinion, the number is much bigger — I think it is a $100 trillion number, because you are looking at the fund management market which is more than that. What stands between us and that number is regulatory clarity and investor education. The UAE is a great example of providing both together. Regulatory clarity with investor education and institutional education — and you have magic ready to happen.
Thank you so much for being with us today.
Thank you very much. Have a good day.
