OKX MENA CEO Cautions Crypto Industry on RWA Tokenization

OKX MENA CEO Rifad Mahasneh has cautioned the cryptocurrency industry to concentrate on delivering practical benefits as the interest in real-world asset (RWA) tokenization surges.

During an interview at the Token2049 event in Dubai, Mahasneh emphasized the importance of clearly demonstrating the advantages of tokenizing specific assets. He noted that while tokenization holds promise, not all assets require it. The key, he said, is to identify those that provide tangible, everyday value.

Mahasneh acknowledged that, like other industries, the Web3 space can experience growth driven by hype. However, he stressed that the primary focus should be on delivering real-world utility.

Mahasneh's remarks come at a time when there is a growing number of RWA tokenization projects in the Middle East, particularly in the United Arab Emirates.

On May 1, MultiBank Group entered into a $3 billion RWA agreement with the UAE-based real-estate firm MAG and blockchain infrastructure provider Mavryk, marking the largest RWA initiative globally to date.

Additionally, the UAE government has been actively involved in RWA tokenization. On March 19, the Dubai Land Department announced a pilot phase of its real-estate tokenization project, collaborating with Dubai’s Virtual Assets Regulatory Authority.

On January 9, RWA project Mantra signed a $1 billion deal with Damac Group to tokenize the assets of the UAE-based conglomerate. However, Mantra experienced one of the biggest token collapses in crypto history on April 13, wiping out billions in market capitalization.

Mahasneh attributed the region's progress in tokenization to its clear regulatory framework, which allows institutions to understand how key players in the space are governed.

The executive also commended the UAE's progress in stablecoin regulations. In June 2024, the Central Bank of the UAE approved a regulatory framework for stablecoin licensing, clarifying the issuance, supervision, and licensing of dirham-backed payment tokens.

Mahasneh highlighted that this regulatory framework demonstrates the UAE's swiftness in regulating crypto-related technologies and provides institutions with the confidence to enter the market.

Since the approval of the stablecoin framework, major players like Tether have shown interest in issuing a dirham-pegged stablecoin. On April 29, institutions such as Abu Dhabi's sovereign wealth fund, the Abu Dhabi Developmental Holding Company, First Abu Dhabi Bank, and the International Holding Company partnered to launch a dirham-pegged stablecoin, pending regulatory approval.