GCC SWFs explore tokenization for smarter capital management

The trend of bringing real-world assets on-chain is reaching sovereign wealth funds, and we’ve already seen evidence of this in action. Mubadala Capital tokenized one of its private market funds through its tie-up with blockchain infrastructure provider Kaio. The development opened up a fund previously reserved to select institutional investors to a much wider pool.

Elsewhere in the GCC, Saudi Arabia executed its first sovereign-native tokenized title deed transfer in early 2026. Meanwhile, the Qatar Financial Center (QFC) will introduce real estate tokenization, enhancing access and liquidity in the sector.

Rather than a one-off, the development lands as GCC SWFs are eyeing tokenization to boost portfolio flexibility, as part of broader digital transformation agendas, Deloitte’s Sovereign Wealth Fund leader Julie Kassab previously told EnterpriseAM. Funds are examining and testing out infrastructure readiness, regulatory clarity, and governance before full-scale rollout within their frameworks.

A long-term play rather than a quick fix

The funds are viewing tokenization as an add-on tool to complement the disciplined capital management strategies typical of sovereign wealth funds, Kassab told us. The upside of tokenization comes through the possibility of widening its investor base and offering more granular liquidity options, she added.

There’s also a strategic control draw as funds will be able to preserve governance and overall long-term ownership structures while also bringing in new capital into cashflow layers and specific assets, Kassab says. In short, it’ll allow for more international participation without compromising strategic control over national assets.

The efficiency upside: In addition to retaining strategic control over the assets and allowing for more portfolio scalability, thanks to external capital, the instrument can help boost operational efficiency, including through automating payouts and streamlining investor onboarding and capital deployment, FTI Consulting’s Managing Director Jorge Carrasco told EnterpriseAM.

The who and where

Who is expected to pitch in? Institutional investors with existing digital-asset mandates, especially Asian and European players experienced in tokenized infrastructure or real estate, are currently the most likely to engage with tokenized GCC assets, Kassab said.

Family offices are also showing early interest, but broader adoption hinges on regulatory harmonization and greater asset-level transparency, she told us.

Sector-wise, tokenization could play a key role in large-scale infrastructure, real estate projects, and private market funds, allowing sovereign investors to access global capital while maintaining long-term control, Carrasco told us.

Real estate tokenization has taken off in the UAE in particular, with the sector seeing much of the momentum after the Dubai Land Department launched the first phase of its tokenization initiative last year. The program has since moved into its next stage, allowing secondary-market trading of tokenized property interests.

Now, that momentum is spilling over into other areas, including tokenized deposits and gold.

Regulation is key for a wider roll-out

Tokenization deployment depends on statutory certainty, clear regulations, cross-border standards, and investor confidence, Kassab noted. GCC SWFs will need valuation frameworks and independent verification, integrated with custodial and reporting systems, to ensure tokens reflect the real-time value of assets.

When it comes to tokens accurately reflecting the real-time value of assets, Carrasco points to processes combining net asset value calculations, data fees, and controlled mint and redemption mechanisms as helping to value a token accurately.

The international issue: Coordination between regulators and central banks in different jurisdictions is critical for cross-border scaling and wider deployment, Kassab adds, flagging the need for setting common rules on custody, disclosure, settlement, and investor protection. Having the regulatory frameworks in place is especially important to cross-border transactions for sovereign wealth funds, Carrasco added.

Ahead of the curve: GCC central banks have already either defined or are actively developing licensing regimes for tokenized securities, Carrasco added.

The challenges remaining

The upcoming challenges in a nutshell: Scaling challenges stem mainly from regulatory limits on which assets can be offered, especially to retail investors, Carrasco said. Widespread participation from retail investors hinges mainly on accessibility, and on regulated distribution platforms maturing to open up participation options for individuals.

What’s next?

Tokenization could possibly become a mainstream tool for sovereign capital deployment by 2030, Carrasco said, enabling broader investor participation in sovereign mega projects while boosting capital velocity, allocation options, and transparency. As strategies adapt to a more digital economy, tokenization will join a larger toolkit to streamline deployment and widen international participation, Kassab added.

Will it replace existing structures? Tokenized assets can coexist with existing land registries and fund structures, serving different roles within investment ecosystems, Kassab told us. As regulatory frameworks evolve, registries may move on-chain, Carrasco said. In the GCC, early initiatives, such as updates to real estate registries, are already paving the way for tokenization to transform asset-ownership infrastructure.

In short, increased adoption by sovereign wealth funds would mirror the broader evolution of financial infrastructure and capital deployment models, Kassab says.