Five Signals of Digital Assets Industry Maturation in the Middle East

Across these topics, five themes stand out as the most likely to shape the next 12 months in digital assets markets in the Middle East. 

1. Tokenization graduates from pitch deck to pipeline

Tokenization of real world assets is moving from buzz to business line. Wall Street banks are piloting bond tokenization on public chains and Dubai real estate developers selling properties as fractional tokens. Real estate remains a hot topic in tokenization discussions, however industry participants, particularly in commodities and trade finance, are indicating that their boards now expect tokenization roadmaps, not merely “innovation labs.”

2. Stablecoins are becoming the rails

Following last year’s race to issue the largest stablecoin, this year is focused on what can be done with them. Remittance providers are touting sub-second settlements to Asia; DeFi protocols are offering yield-bearing stablecoin accounts that auto rebalance across chains. The message from the industry appears to be that a regulated, asset-backed dollar on-chain is set to become a new payments backbone — no crypto UI required.

3. Artificial intelligence and blockchain may be the next full-stack stack

AI’s intersection with digital assets continues to be a hot topic. Indeed, if AI powers the user experience, blockchain can underpin the trust layer. Recent innovations include AI agents that draft smart contracts, verify counterparties and trigger on-chain escrow. One founder has referred to these advancements as, “ChatGPT with a wallet, immutable and keeping track records in public.” 

4. The UAE as a regulatory sandbox

Executives from numerous jurisdictions and regulatory agencies across the UAE appear to be increasingly unified in collaborating to bring clarity for everyone. Some industry watchers in the region anticipate that several multinational exchanges may shift compliance headquarters to the Emirates. Recent updates in the Virtual Assets Regulatory Authority’s rulebooks, and the Securities and Commodities Authority’s public consultation for tokenized bonds and sukuks, show further efforts to establish a transparent and secured ecosystem in Dubai. 

5. Crypto natives continue to mature

Capital markets are building stronger infrastructure and startups are sharpening their sophistication around yield strategies, perpetual decentralized exchanges and more. Institutional capital appears to be courting crypto engineering talent and protocol teams are looking for experienced executives. That convergence is a bullish signal of the industry’s ongoing maturation.

Overall, the crypto industry continues to evolve, mature and pursue greater credibility, just as it should be as market capitalisation grows. 

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The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.