The wealth and investment landscape has seen its fair share of changes over the last few years and new technologies have emerged as a powerful factor, with the most significant of them being digital assets.
As the ecosystem matures, cryptocurrencies and digital currencies have presented their share of opportunities and concerns.
The Wealth Today Summit held on June 21, 2022, at the Address Dubai Mall Hotel, delved into emerging trends and factors that affect the investment ecosystem, especially in the UAE.
Speaking at the summit, the CEO of crypto incubator and advisory firm TDeFi, Gaurav Dubey, said: “The last three years have been pivotal in mass adoption and acceptance of crypto as an asset class in the average household. Factors such as tokenisation of regulated securities like gold, carbon credits and even trees played a huge role in making this happen.
“Today, crypto has found its peg in the traditional finance market. We see that the crypto market is performing better than traditional assets currently. As a high-risk asset, crypto cannot form a majority of the asset portfolio but it has found its place in the wealth preservation funds.”
The topics discussed at the summit also covered various aspects of the digital asset spectrum such as DeFi for family offices, tokenisation of funds and virtual assets, investing alternative investments and hedge funds, family offices navigating the Venture Capital space, and investing in offshore jurisdictions: themes and considerations.
Digital assets are now also finding their way into family office portfolios, and are becoming part of the diversification play.
The co-founder and CEO of Neovision Wealth Management, Dr Ryan Lemand, said: “Family offices, particularly in this region invested heavily in equities and real estate. Real estate takes a big portion of an investment portfolio. However, it is tedious to register or exchange your property in the traditional manner.
“Besides, with the peak we observe in both these segments, it makes sense for family offices to consider alternative investments in the coming periods. At the sessions, we introduced DeFi to more traditional investors rather than specialised investors. With DeFi, a smart contract adds convenience and makes it accessible to investors.”
The managing director for MENA at Kraken Crypto Exchange, Benjamin Ampen, added: “DeFi is in a very interesting space, and still in its infancy. It can address issues like inefficiency, opacity, lack of interoperability and centralised control. It comes with an attractive promise of removing intermediaries.”
Going forward, regulations will also play a key part, experts added. ADGM’s Financial Services Regulatory Authority (FSRA) is at the forefront of issuing regulatory frameworks around DeFi.
The senior executive director for Authorisation and Fintech at ADGM’s FSRA, Wai-Lum Kwok, said: “We released a whitepaper with reference points to encourage dialogue with the community. It is based on four concepts; DeFi does not change the nature of financial services; Equivalent risk, equivalent rules; No anonymous participants; and governance of defi protocols.”
The summit also delved into the nuances of investing in offshore jurisdictions, tax implications and associated risks in addition to having a high-level conversation on the state and future of investments in alternative investments and hedge funds.
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