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Turning Real World Assets into Digital Coins in MENA

Key Takeaways:
  1. Tokenization transforms real-world assets into digital coins, making ownership clear and easily tradable.

  2. Tokenization gains traction in finance, real estate, and commodities in MENA, with key players like HSBC, ADX, SmartCrowd, and DMCC leading the way.

  3. HSBC and ADX's collaboration to tokenize bonds highlights a bold move toward digital transformation in traditional finance in MENA.

  4. Platforms like SmartCrowd and consultancies like 10 Leaves showcase how tokenization addresses challenges in the real estate sector in the Middle East.

  5. DMCC's gold-backed token reflects the broader trend of tokenizing significant assets like commodities, aligning with a projected growth rate in the tokenization market.

  6. Tokenization offers increased liquidity, reduced transaction costs, expanded access, and support for innovation, shaping the future of finance in the Middle East.

  7. Pend provides businesses in Egypt and the Middle East with tools to navigate the shift to digital tokens, ensuring a smooth transition into the era of digital world.

Real World Assets into Digital Coin

Tokenization is like turning your real stuff into digital coins. These coins show who owns what. So, you could own a piece of a house or some gold, and it's all tracked on a computer. This makes it easy to trade and share ownership.

Real-World Assets (RWAs): Everyday Things We Own

Real-World Assets (RWAs) are things we use every day, like houses, gold, or even oil. The problem is, these things are often hard to trade or share. Tokenization solves this by making them digital. Now, you can easily trade or own a piece of these everyday things.

Tokenization in the Middle East

MENA region experienced a 3.1% drop in its economy during the Covid pandemic in 2020. To address this, the World Economic Forum's Regional Action Group on the Middle East and North Africa (MENA) created a plan. According to this plan, using tokenization could add a significant $230 billion to the region's economy every year by 2030.

The Rise of Tokenization in MENA in different Sectors:

Tokenization is becoming popular in the Middle East and North Africa (MENA) region, especially in finance, real estate, and commodities. HSBC and the Abu Dhabi Securities Exchange are working on tokenized bonds, and companies like SmartCrowd and DMCC are using tokenization to make real estate and commodities more accessible. These changes show a growing trend in how different industries operate in the MENA region.

RWA types

Strategic Collaborations: HSBC and Abu Dhabi Securities Exchange (ADX)

HSBC Bank Middle East and the Abu Dhabi Securities Exchange (ADX) have teamed up for a strategic move. They plan to explore fixed-income securities, which include creating tokenized bonds. The goal of this partnership is to use HSBC Orion, the bank's digital asset platform, to issue digital bonds and have them listed on ADX. This collaboration represents a bold move toward adopting digital changes in how traditional financial tools work in the Middle East and North Africa (MENA) region.

Real Estate Revolution: SmartCrowd and 10 Leaves Leading the Way

Real Estate is a highly valuable asset class in the Middle East, tokenization offers solutions to challenges like high entry barriers and regulatory hurdles. Platforms like SmartCrowd, a UAE-based initiative allowing investors to buy fractional shares of properties, and 10 Leaves, a consultancy firm facilitating the tokenization of real estate assets in the UAE, showcase the practical applications of tokenization in this sector.

Commodities and Tokenization: DMCC's Gold-Backed Token

Commodities, a significant asset class in the Middle East, are not exempt from the wave of tokenization. DMCC, a Dubai-based free zone, has pioneered the launch of a gold-backed token. This initiative aligns with a projected Compound Annual Growth Rate of 16.8% through 2029 for the tokenization market in the MENA region.

Tokenization's Potential Benefits in the Middle East

Tokenization of real-world assets in the Middle East holds the promise of various benefits for the region:

  • Increased Liquidity and Value: Enabling fractionalization, trading, and valuation of assets that are otherwise illiquid, costly, or difficult to trade.

  • Reduced Transaction Costs and Risks: Minimizing the need for intermediaries, paperwork, and verification, while enhancing the security and transparency of transactions.

  • Expanded Access and Inclusion: Lowering entry barriers, increasing affordability, and expanding the market of assets, particularly for underserved or unbanked populations.

  • Supporting Innovation and Diversification: Creating new forms of assets, products, services, and business models, as well as enabling new sources of funding, investment, and revenue.

The Middle East is moving towards a new era with digital innovation at its core. Collaborations, rule-testing spaces, and innovative platforms are showing the way to a future where digital tokens will shape the region's economy. This shift to digital is vital for businesses in Egypt and the Middle East.

Pend provides businesses with easy tools to prepare for the future of digital tokens. It simplifies following the rules and making the switch to this exciting new way of using money. With Pend, businesses can smoothly transition into the era of digital transactions.

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