At a panel for the World Economic Forum’s Global Technology Governance Summit today, United Arab Emirates minister of economy Abdulla Bin Touq Al Marri said that cryptocurrency and asset tokenization will be key to the country’s plans to double its economy — currently estimated to be the 34th largest in the world — in ten years.
Al Marri was joined on the panel, titled the “Arrival of the token economy, from art to real estate,” by artist Harry Yeff and WEF executive Sheila Warren. While much of the conversation centered on the current NFT craze, Al Marri’s comments centered largely on forthcoming tokenization use cases and their regulation.
According to Al Marri, the country has ambitions to grow its GDP by 7% yearly, which would put it on track to double the size of its economy by 2030. Tokenization will be a key cog in this effort, as “tokenization compliments information-based economies.”
Perhaps most exciting from an adoption standpoint, the minister said that the country has several ambitious projects underway, including a study underway being conducted along with the WEF on funding small and medium sized enterprises with a government-run token platform, possibly as part of a “regional token exchange” which is “in our agenda,” Al Marri said.
When asked about how the government — which by nature is deeply embedded in a pre-token economy — will interact with these new models and the need to regulate them Al Marri said the goal is to protect investors as well as the larger financial system without stifling innovation.
“We’re a government, we’re good at regulation,” he joked.
He highlighted two pain points in particular: Lack of “harmonized regulation,” and lack of sufficient regulation. He noted that jurisdiction and regional regulations need to work together in order to prevent cloistered bubbles of innovation, and to ensure that new asset models, such as fractionalized ownership, benefit all.
“How can we bring fractionalization to a level where everyone can benefit?” He asked.
He also noted that fractionalized ownership can lead to real world-meets-blockchain bugaboos: if an apartment has fractionalized ownership, who pays the upkeep fees? If there’s a fractionalized painting, what happens when the painting gets stolen?
Ultimately, the country is eager to lead the world in facing these questions head-on.
“We understand the challenges as such, but we are experimenting, and allowing the UAE to be a site of experimentation.”