Tokenisation keeps getting called the biggest shift in capital markets since electronic trading. The question is whether that is real or still mostly a pitch deck. Joining me to separate the two is Vishal Sacheendran, Vice President of Global Markets Strategy and Operations. Vishal, welcome to Wall Street to Mena.
Thank you very much.
Is tokenisation hype or is it real right now?
To put it mildly, the direction is real. But the scalability is still a long way to go. Tokenisation and digitisation of trade has been there for decades in some form. But now with tokenisation, what you see is the infrastructure changing — helping to improve the transfer of equity, transfer of ownership, and the settlement leg of a trade, making it more efficient. I would not say it is hype. I would not say it has matured right now. But we are just at the beginning of that change.
What kind of assets are actually being tokenised today, and which ones are still mostly limited?
Nothing is purely theoretical — anything can be tokenised. What you see today is government bonds, money market funds, some commodities like gold, some private credit, and growth in real estate tokenisation. But the issue is not whether something can be tokenised. You should understand that tokenisation — as a wrapper — does not mean you will get a liquid market. While there might be high demand and liquidity for bonds and equities, illiquid assets like art will not find liquidity as fast as you want just because they are tokenised. You still need someone who actually wants to buy those things.
What does MENA specifically need before tokenised assets can trade at real scale?
A couple of things. First, legal clarity. If I own a token, is there enforceable action on my ownership? Can I go to court and say this is mine? We are still seeing room for improvement in the regulatory infrastructure — custodians need to be regulated, the settlement layer needs to be digitised, and transferability needs to work cross-border. Then there is the final piece, which is perhaps the most important — the cash element. Tokenisation solves half the issue. If you do not have digitised cash — whether CBDCs or stablecoins — through which tokenised trades can settle, you are still going to see significant limitations. We can see trends moving that way, but we still have time.
What is the actual case that tokenisation does something existing infrastructure cannot?
With tokenisation, you are changing the plumbing of the entire trading market. You are not just making things faster on top of the existing system — you are changing the underlying infrastructure so that transfer of ownership, settlement, and recording can all happen at the very same time. There is never enough efficiency to stop pursuing, and tokenisation genuinely moves the needle here.
Where are the biggest regulatory gaps you are seeing right now?
I would not say regulators are cautious — it is more that they understand what tokenisation is doing. ADGM has licensed tokenisation players. VARA has the same. Qatar is doing their own. Bahrain has their own. Everyone is moving. But the question is not how each regulator understands it — it is about the interoperability between the different regulatory frameworks. I can issue a token from Bahrain, use a custodian regulated by VARA, and use a settlement layer set up in ADGM. These frameworks need to work together. Tokenisation has made financial markets a lot more borderless, and the regulatory infrastructure needs to follow.
Thank you Vishal.
