The Future of Tokenization: How Digital Assets are Reshaping Investment Strategies

Crypto legislation stumbling as Republican holdouts stall on the House floor.

Now hardliners demanding a ban on ACBDC before advancing the bipartisan market structure bill.

Meanwhile, tokenized stocks are going mainstream, digital versions of real shares that let you track a company's value without owning the actual stock or getting voting rights.

Now tokenized. still early, but they could change how everyone invests.

Joining us from Dubai is Abdul Rafa, who is the co-founder of Zig Chain, a level one blockchain.

Good morning.

Thank you so much for joining us.

So it is crypto Week.

What does this week's crypto legislation push in DC mean for the future of global digital asset regulation, and what are your expectations here?

Yeah, first of all, thank you very much for inviting me.

I think this is, uh, this is very exciting.

Uh, I think, I think we should look at the genius act as a very strong signal that is now the new era of the regulated digital dollar.

Uh, you know, by mandating, I think this fully backed high quality reserves, it does not just create the clarity for the US market, but I think it sets a precedent for how the global jurisdictions can approach the.

Stablecoin compliance and I think that is a single most important thing because if you look at this now this has truly blurred the boundary of the crypto and non-crypto.

Like, you know, the crypto has been a table for very long for a lot of traditional players, but I think after this groundbreaking legislation, you can actually see that there is no line in between and I think, I think this will help a lot.

And, uh, in, in opening the geographical boundaries across the globe, uh, number 2, it will add a lot of transparency and the transferability and the secondary market liquidity as well.

Um, essentially, you know, making the, um, wealth making opportunities possible for everyone across the globe.

Um, it is very exciting to see.

How the market that the US has moved in the last one year specifically around the regulation, uh, from being on the completely other side of the spectrum to being on a fast track towards making it regulated and completely under the umbrella of where everyone can do right business.

So it is fascinating really.

Yeah, and I do want to get your take on tokenization, institutional investors are betting big on tokenization, but of course strategies do differ and they do vary.

So what's driving the different approaches, not just in North America, but also Asia and the Gulf?

Yeah, absolutely.

So I think tokenization is a very, very hot topic right now, and there's a slight difference between how the US institutions are looking at the tokenization versus the Asia and Gulf.

So I think US institutions are leaning heavily on the risk management, compliance layers, and custodial partnerships before heavily scaling into the RWA initiatives.

While if you look at the Gulf market and the broader Asia market, you will see that there is a lot of business focus in terms of real estate, private debt, and private equity.

Um, you know, what we have been trying to do is to, is to see that how the, um, tokenization is more scalable, more adaptable using the fund tokenization structure instead of, uh, uh, you know, the single asset tokenization because the fund tokenization allows you to get the same traditional finance liquidity, but in a more cheaper.

An advanced way and ultimately, you know, you are able to basically bring in the retail user at the end of it.

Um again, I think, I think um it would not be unfair to say that over the next 5 years we might going to see a lot of uh traditional finance instruments like stock markets and other, other things to move towards the, uh, you know, tokenized rails just by the matter of fact that managing it is much more easier and cheaper.

Yeah, and while we're on the topic of compliance, protocol level compliance is becoming a must have when it comes to digital asset infrastructure, but how is it changing the way that blockchains are designed from the ground up?

Yeah, absolutely.

I think this is a fantastic point.

I think that what it means is that the compliance is not an afterthought anymore and instead of relying just on the third party custodians and off-chain attestations to basically do that, you know, they can do the third party, the compliance.

But what now blockchain needs to do is to embed these things inside.

The way I see it is that if you go.

5 year or 10 year back, 5 years or 7 years back, you see blockchains were making infrastructure there for technological people, for developers, for the deaf community.

But now the blockchains, like for example, you know, the chain or other chains, the way we are doing it is that we are actually making it permissionless despite being permissionless at its core, making sure that the institutional and the compliance is built at the bottom layer, and there are definitely some licensing in the right jurisdictions that are there because you need to understand that the larger institutions will not come into the play unless they see the right jurisdictions in the world doing the right regulation and giving the right licensing.

So compliance now has to be built in the core of the blockchains.

Yeah, and finally, I do want to ask you this question since we're talking about regulations.

So as global regulators turn up the heat, how does DFI actually stay both ethical as well as compliant, and what does that balance really look like for you?

Yeah, I think, I think, as a matter of fact, you know, like even this without even cryptos, the matter of fact is that The essence of money has been that it can be used for anything, right?

Over the years and over the decades and centuries, um, you know, regulators and banks and central banks have created rules, but still, you see every year banks and financial institutions getting penalized for billions of dollars because they did not have enough rails in place.

But the advantage in blockchain is that everything can be traced.

So if the user, if the user focused gaps or applications or, uh, you know, the companies, they can comply at the back and everything can be tracked, number one, when it, when it comes to like uh uh a balance, yes, it is important that the blockchain should be allowed to thrive and people should be able to look into the next generation finance by being transported ported, uh, you know.

Transport, transparent interoperable, and futureproof, but it is also important that the wealth manager, fintech builders, and communities, they need to understand that this cannot be a wild west anymore.

If you need serious money, if you need governments, and if you need regulators, there has to be some sort of oversight on this, which does not mean that you can, you change it into a bank kind of a thing.

No, that's not the point.

But there has to be like the right set of compliance, and I believe for example Dubai is a great example.

They have taken great initiatives like we are working with some regulators here DIFC, ADGM, amazing jurisdictions where, you know, that they are striking the right balance where you can innovate by being compliant as well.

And yes, we will have to leave it there, but thank you so much for joining us today.

We appreciate your time and your perspective.

Thank you very much.