Security token offerings will be launched in the MENA region, Emaar is talking to exchanges for STO offering but will need Bookrunner, and Dubai Land Department developing regulations for prperty transfers under STOs.
DALMA Capital CEO Zachary Cefaratti discusses Tezos, BTG Pactual, partnership in MENA and the region’s readiness for Security token offerings given new regulations from Dubai Land Department pertaining to transfer of propertiescompatible with security token offerings.
Recently the Blockchain scene buzzed with the news about how Brazilian BTG Pactual and Dalma Capital will utilize Tezos for STO (Security Token Offering) across MENA and globally with projects worth $1 billion. Security token offerings in the real-estate sector have been booming and the MENA region is no exception. Emaar had announced they would be carrying out an STO this year as well.
UNLOCK asked Cefaratti why Tezos and not any other blockchain STO platforms. He stated, “The Tezos Foundation and community has some of the leading technical expertise in this space. As such it is ideal for STOs as it is scalable and effiicent with the use of proof of stake enhancing both security, and upgradability. Proof of stake is a process which allows self-amendments through on-chain governance. Eventually, the technology behind security tokens will be invisible to users, as is the protocol layer of conventional electronic securities trading infrastructure and the internet itself. We see this protocol as sufficiently future-proof and built to last, and that investors will find the underlying tech to be sufficiently seamless.”
DALMA capital has been working with PTG Pactual on their own STO under REITBZ which raised more than $10 million. Cefaratti explained, “We have been involved with the BTG Pactual deal since the early stages of the offering as advisors and joint bookrunners.” He adds there will be more STOs in this sector including the MENA region. “This is just the beginning; stay tuned for more to come including MENA.”
When asked if there was any work on STO offering with Emaar, he replied, “I am not aware if Emaar has appointed any bookrunners to assist on their offering, however I am aware that they are already in discussions with exchanges.” He adds, “We see a lot of new issuers attempt to go straight to market without experience in the bookrunning process or with the hopes that a listing alone will attract liquidity, but most subsequently struggle to gain serious traction. Emaar is a sophisticated group with a great portfolio and I expect they will be appointing bookrunners once they are ready to go to market. Given that there are only a handful of firms with any experience, infrastructure or licensing to execute this globally, it will be interesting to see who they select as partners.”
As for the future of STO offerings in the region and subsequent regulations to govern these, Cefaratti states, “At the moment in the abscene of regulations specific to STOs, institutions must work within existing securities regulations and apply them to STOs. It is important to understand that securities regulation is in place in every major jurisdiction globally with respect to how, by whom and to whom ANY securities (including STOs) can be sold.”
As such Cefaratti believes, “ STOs are simply an application of a different database technology (a blockchain) for maintaining and updating the ledger of owners, enabling more efficient transfer, access and custody it does not necessarily warrant any new or specific securities regulation, as the existing securities regulation paradigm does not typically dictate what database technology should be utilized.”
In terms of real-estate security token offerings in Dubai, he adds, “For issuers focusing on real estate assets in Dubai, such as Emaar, they need to consider DLD ( Dubai Land Department) regulations with respect to transfers of properties, which are currently incompatible with STOs due to a substantial levy on any economic transfer of interests in real property. We understand that the DLD is working on a progressive and forward looking regime to address this, and we look forward to seeing this implemented.”