Today we are talking about tokenisation and specifically tokenising funds. My next guest says that issuing the token behind a tokenised fund is the easy part. The hard part is what you actually do with that token once it is issued. I am pleased to welcome Venki Subramanian, MD for Ascent MENA and Americas. Welcome to the show.
Thank you. Welcome.
Can you tell us what Ascent Group does and your focus on MENA and the Americas?
Ascent is a global fund administrator headquartered in Singapore. From 2019 we have been in the digital asset space as well. When it comes to fund administration, we are a partner to the investment manager and the infrastructure behind the fund itself — NAV accounting, investor KYC and AML, and supporting the entire audit process for the fund. I take care of the entire operations between the UAE and Riyadh. I am also the CEO for the ADGM entity, which has been established since 2022. And I also take care of the Americas, which includes the US and the wider Cayman BVI.
What is the status of tokenised funds in ADGM today?
If you look at it, Treasuries have been the first to go — and that is a proper market fit for now. But we are not at mass adoption stages. When you look at Treasuries, it is 24/7 trading, programmability, real-time settlement, yield and coupon. But when it comes to other categories of real world assets like private credit and real estate, we are seeing them move on-chain — but for a different problem, which is basically getting ready for the next 12 to 18 months.
What is the real problem holding up tokenised funds really taking off?
The secondary market is almost non-existent right now for real world assets. Liquidity is a challenge because they are closed-ended. And if you tokenise it, the whole intention is to have additional liquidity and distribution capabilities. We are not 100% there yet. The infrastructure is being built — but we are probably 12 to 18 months away.
Does tokenisation take away the need for a fund administrator?
I would say it is more of an enabler these days rather than taking away the entire role. Tokenisation can probably look at reconciliation and the smaller stuff. But when it comes to NAV calculation, when it comes to making a judgement that the AML and KYC for an investor is okay — that is not happening on-chain yet. It does not take away the responsibility.
What do fund managers get wrong when they go on this tokenising fund journey?
It is not the blockchain that goes south — it is mostly the operating model. You start engaging with the tokenisation provider and then realise that your smart contract and legal documents are not matching. The cash leg of the settlement and the on-chain leg do not match. My advice is to bring all the players and providers onto the table on day one and discuss how the process could work. Also do a proof of concept in terms of auditing the platform itself and making sure there are no cybersecurity risks.
Is ADGM's regulation set up for this type of technology advancement?
These regulations have been there for a while — not just one iteration. They have been through multiple levels of scrutiny and modification as required. What is happening now is that the regulations are already in place, the infrastructure is there, and there is institutional capital to be deployed. All of that is coming together. I think it is the best time to be in ADGM for tokenised funds. We are very close.
Thank you so much for joining us at the ADX today.
Thank you very much.
