America's surge in crypto technology investment took off dramatically this year, despite not even ranking in the top 10 countries for digital token sales last year.
According to data from CoinSchedule, the UAE has overtaken the United States and the United Kingdom to become the largest contributor to global crypto chip sales this year.
Florian Glatz, co-founder of Fundament, said that the data shows the efforts of local authorities to make the country a blockchain hub.
The country raised € 210.5 million, or more than 25 percent of total funding this year, with the Cayman Islands ranking second with € 103.8 million and Singapore with € 89.7 million.
The data shows that the United States, which dominated token sales, fell to sixth place with € 37.2 million.
HTOs are popular with institutional investors.
Glatz said security chip offerings (STOs) have proven popular with institutional investors, more comfortable with their connection to traditional value stores.
STOs are similar to Initial Coin Offerings (ICOs), but with documentation, regulatory approvals, and proprietary rights.
"STOs distribute security tokens that, as the name implies, are representative of an underlying asset (such as real estate) that has a real value in dollars, provides greater protection to investors, and operates within a regulated framework," he said .
The UAE made an investment of € 67 million through STO in the first quarter of 2019, representing more than half of the total global investment made through STO.
While capital inflows into the region are higher, of the 47 OCTs launched, Glatz said only two could be attributed to the UAE.
The Abu Dhabi Global Market Financial Services Regulatory Authority has established a framework to regulate cryptocurrency activities.
In addition, the United Arab Emirates and Saudi Arabia introduced a new cross-border payment cryptocurrency between the two countries.
Europe ... an attractive place for real estate investment
Robin Matzke, co-founder of Fundament, said that in addition to attracting foreign direct investment to the Middle East, local investors in the Middle East could be given incentives to seek similar investment opportunities in the Middle East. abroad, especially as they become more familiar with technology. Build wealth.
However, he said that Europe was a particularly attractive destination for real estate investments, benefiting from a growing economy, a low unemployment rate and a high demand for new Residential / Commercial Units.
"Token real estate investments, in booming markets like Germany, are paving the way for investors from the Middle East region. Saudi asset management company Sedco Capital, Sidra Capital, Investcorp of Bahrain and Gulf Islamic Investments are just a few. of the main companies that concentrate their real estate investments in Germany, France and the United Kingdom for more than € 931 million dollars, "he said.
While Trump's tweets and Facebook's Balance dominate the blockchain conversation, the Middle East continues to make great strides in blockchain regulation.
Saudi Arabia recently relaxed its 49% limit on foreign strategic investors in shares of publicly traded companies, as the Kingdom has opened the region's largest stock exchange to a more diversified investor base.
Blockchain adoption on the rise
Like many countries, Matzke said that Saudi Arabia and the United Arab Emirates were among those that had warned investors to invest in ICOs due to concerns about market volatility, widespread scams and a lack of investment. regulation.
"A few months later, the current development has seen the entire sector move away from ICOs in favor of HTOs," he said.
The United Arab Emirates' Financial Regulator, the Securities and Commodities Authority (SCA), says concrete legal frameworks for token assets will be released soon to enhance legal certainty. The Central Bank of Bahrain has already approved 30 companies through its regulatory sandbox, of which 11% are "crypto services", including ATMs and tokens.
Progress in blockchain adoption in the Middle East has accelerated considerably. The Dubai government has planned to use the technology for all its paperwork by 2020, as well as the UAE Central Bank working with the Saudi Arabian Monetary Authority and exploring the state of the art. use of your cryptocurrency. "For cross-border transactions.
Glatz said investors, both foreign and local, would feel more comfortable with symbolization as a means to invest and create sustainable wealth, both in the Middle East and in Africa. other parts of the world that adhere to symbolization would flourish.
Single and unified framework
Ultimately, Glatz said the regulatory regimes for asset symbolization in the Middle East and Europe would converge towards a single, unified framework, further strengthening the allocation of capital between these two regions.
"The current migration to a decentralized financial infrastructure that transcends borders will encourage legislators to abolish inconsistent regulations of securities laws, investor protection rules and contract laws governing the transfer of securities," he said. he stated.
For Tokenization to keep its promise of being a superior form of investment, he said the market will have to demonstrate that it is ready to use these new investment instruments by investing large funds in large projects.
"Token real estate funds, whose first serious projects now appearing in Europe, are expected to change the situation," he said.