Tokenization of financial assets is a buzzword used in the blockchain world and is gaining ground in the United Arab Emirates. Tokenization is the representation of an asset in digital form with the help of a smart contract and a distributed ledger. The creation of the Dubai International Financial Center (DIFC) and the Abu Dhabi Global Market (ADGM) is helping fuel the growth of the fintech sector in the United Arab Emirates. According to a MAGNiTT report, the United Arab Emirates is the largest fintech hub by number of fintech startups (46%), number of transactions (47%) and total funding (69%) this year, followed by Egypt with 27% of offers and Lebanon with 6%. To capitalize on the upward trend, Switzerland-based Jibrel Network aims to harness the latest innovations in cryptography, distributed ledger, and smart contract technologies to build the world's financial networks. future. "We realized that cryptocurrencies are one of the best ways to deal with transactions, but one of the worst ways to store value. We thought there should be a way to combine the two and that's what Jibrel is. At Jibrel , we provide stable, regulated, and insured traditional financial assets, as well as the transactional properties of crypto, which is easy to send and receive, 24/7, and programmable," Talal Tabbaa, Co-Founder and Director of Jibrel Network Operations, TechRadar Middle East said. By combining these two elements, he said it was an asset-backed token. “It is a symbol of the Ethereum chain and removes the element of volatility, the AML issue, and other potential downsides of cryptocurrencies. We started by focusing on cash, stocks, commodities, debt, real estate, and futures. We found that the biggest market failure was in debt," he said. Debt was by far the least technologically advanced of all the asset classes; He added that about 60% of the treasures were still exchanged over the phone. "We quickly understood that it was by design. The obscurity of markets and the complexity of debt is inherent. Banks wanted to be ubiquitous and that's where their fees are charged. We realized that the solution we wanted to sell to the bank was the they didn't want. They don't want transparency because there's no real price discovery and this ubiquity is the main way to make money in trading," he said.
Debt markets don't want to take risks
Jibrel Network was launched in 2017 with an investment of 100,000 Swiss Francs (€100,927) and two fundraising events were organized: €3 million and €30 million in Switzerland. After entering the United Arab Emirates in 2018, Jibrel settled the first Islamic block bond ("Smart Sukuk") with ADGM together with Al Hilal Bank. Tabbaa said the risk appetite for new technologies is simply not there and the debt markets are not willing to take more risk to improve business. 39; operating efficiency. Other startups are focusing on debt, but Jibrel has gradually moved away from debt over the past year to focus more on private equity. “Public actions don't need to be on blockchains and the centralized database works fine, but there is a real market need for optimized actions. Today, startups and SMEs are looking for other ways to raise money,” he said. Furthermore, he said that private funding platforms should completely change with the use of blockchain. "We believe that the digital economies and financial markets of the future will be built on digital assets, including stocks and tokenized securities. Blockchain platforms will act as catalysts, making investments safe, transparent and efficient in regulated environments," he said.
Fintech has a lot of potential
Tabbaa added that the current maturity of the financial sector is terribly late, which means that fintechs have a lot of potential in this region. However, he said Jibrel's goal was to make a difference in the financial sector and try many different initiatives. Jibrel Network has two subsidiaries: Jibrel Abu Dhabi and Jibrel Dubai. Jibrel Abu Dhabi is a regulated financial institution, which means that Jibrel is authorized to keep client money and organize their investments. Jibrel Dubai is registered as a technology company with the DIFC Hive to sell software to banks and other financial institutions. Jibrel.com, a blockchain-based private finance platform, aims to connect startups with investors and capital management offerings. "The platform is a must and there is a lot of appetite as tech-savvy Middle Eastern entrepreneurs launch successful new businesses and gain support from investors," he said. saying.
Tabbaa believes Jibrel will transform the startup ecosystem by giving access to a broader investment base. These new companies will generate more cash and stimulate growth in this sector in the region. Jibrel.com expects to be available in the first quarter of next year. "Our idea is to convince Islamic banks in the region to stop buying through international brokers because they have assets here." The banks will lose and the winners will be big tech companies like Facebook, Google, etc. Google plans to launch checking accounts next year and will soon be a bank and Facebook with another cryptocurrency. Facebook will wipe out the banks," he said. Over the next five years, Tabbaa wants Jibrel to improve access to capital for individuals and institutions.