Tokenization of Assets Can Inspire Foreign Investors

EghtesadOnline: Linking the capital market to the crypto market can and will encourage foreign investors to put their money in Iran’s capital market using tokens backed by assets, an official with the Stock Market Research Center said.

News ID: ۷۸۷۶۸۲

26 January 2022

"Tokenization of assets eases foreign investors’ entry into Iranian market because they can use cryptocurrency for purchasing tokens backed by assets. This can help increase investment without any negative impact on traders," Meysam Hamedi, head of the financial instruments department of the research center was quoted as saying by IRIB News.

Referring to the increasing interest of Iranians in investing in cryptocurrencies, he said, "Last year, many investors decided to withdraw money from the capital market and buy crypto assets. Our main goal is to find a way to reverse this trend and support the bourse by drawing on the huge potential of the crypt market.”

Recently, the head of Securities and Exchange Organization said Iran’s capital market should genuinely consider use of blockchain technology as it can help address major funding needs and at the same time create new vistas for reviving the share market.

"At the latest in two years we will be compelled to make use of blockchain technology…It will not be long before we start tokenizing physical assets and stocks that can be easily traded on new platforms," SENA quoted Majid Eshqi as saying.

"However, there are still unsolved issues and concerns about the compatibility of the new technology and Islamic  principles, which need to be addressed by the Fiqh [sharia law] boards of the Central Bank of Iran and SEO."

He called on fintech experts to help the capital market with their expertise and suggestions for the efficient use of blockchain technology.

Eshqi urged the Fiqh committees of the SEO and CBI to support tokenization of assets so that shareholders can benefit from innovative technology.

A study conducted by the High Council of Cyberspace recently said total bitcoin trade in Tehran alone is approximately 30-40 trillion rials ($130-174 million).

Another research by the Tehran Chamber of Commerce, Industries and Mining said “an estimated 12 million Iranians have invested in digital currencies whose future, at best, remains uncertain.”

The National Informatics Corporation of Iran said it has submitted to the regulatory sandbox of the stock market a plan to launch digital asset funds,

A digital asset is any asset that exists in a digital format on the blockchain. A digital asset fund is an investment vehicle containing assets in digital format, where the assets share a specific investment objective or outcome.