Another advantage, according to Hughes, is that tokenized funds can be used as collateral, allowing institutions to borrow against their holdings rather than leaving the money tied up in traditional investment accounts. He said major banks are already examining that use.
Hughes expects regulated, yield-bearing stablecoins to become an important tool for corporate treasuries, provided issuers meet requirements including reserve transparency.
“Whether that happens in one, three, or five years, it’s hard to judge,” the Bermuda-based financial firm’s CEO added.
Hughes said he expects tokenization to reach a wider range of investors, including retirement accounts and retail customers, as regulators become more comfortable with the technology. Smaller investment amounts, faster product creation and broader distribution could help bring traditional financial products to people who previously had limited access, he said.
Monai sees a similar opportunity in Saudi Arabia, predicting that tokenization could eventually become a mainstream way for foreign investors to put capital into the country without having to establish local presence.
“I foresee that tokenization will be the mainstream for capital moving into Saudi Arabia,” Monai said.
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