Tokenisation and RWAترميز الأصول الحقيقية RWA

Tokenisation (الترميز) is representing ownership of a real thing, a property or a sukuk or a share in a fund, as a token on a shared ledger that moves between people. The token is not the thing. It is a claim on it.

A photo of a building on a screen is not enough. The single question separating a serious tokenisation project from a worthless pitch is this: what happens when the screen and the court disagree.

The token is not the asset

Tokenisation (الترميز) means representing a real-world right as a transferable token on a ledger. The thing it is attached to is called a real-world asset (الأصل الحقيقي), or RWA: property, a fund unit, a sukuk, a commercial invoice.

The idea sounds simple, but there is a gap behind it that has to be understood. The chain knows nothing about a building in Riyadh. All it knows is that a token moved from one address to another. What connects that token to the building is not technology. It is a legal document saying the token holder owns a share in the entity that owns the building.

That document is the legal wrapper (الغلاف القانوني), and it is the real product. The token is only a transfer interface. If the wrapper is weak or absent, what remains on your screen is a number no judge can do anything with.

The question of the official registry

The hardest question in property tokenisation specifically: which registry is the legal truth?

Property ownership in Saudi Arabia is established in the official real estate registry, not on a blockchain. Which means the token usually does not transfer ownership of the property itself. It transfers a share in a company or fund that owns the property, or an economic right to its returns.

That is a fundamental difference, not a detail. The token holder owns a claim on an entity, not on the bricks. If the entity fails or the manager misbehaves, your route to the asset runs through the entity and not through the chain. So any property tokenisation pitch that does not explain this layer clearly is one to walk away from.

Why funds worked and property stalled

The market reveals the difference itself. The most successful tokenisation so far is not property. It is money market funds and government debt instruments.

BlackRock launched a tokenised fund called BUIDL in March 2024, and Franklin Templeton had a comparable fund before it. The reason this category works is plain: the asset is uniform, liquid, priced daily, and already has a licensed custodian. Tokenisation here adds settlement speed and around-the-clock operation without needing a new legal wrapper invented for it.

Property is the exact opposite. Every property is different, its valuation is an opinion rather than a price, selling it takes months, and registration is governmental. Tokenisation solves none of those. It adds a layer on top of them.

What tokenisation genuinely adds

It is worth knowing the real benefit away from the marketing, and it is two operational things rather than many.

The first is simultaneous settlement. In traditional markets the security moves and the cash moves on two separate paths, sometimes a day or two apart, and that gap is what counter-party risk means. On a shared ledger both legs can be bound into a single operation that either completes fully or does not happen at all.

The second is continuous operation. Markets close at nights and weekends. A ledger does not. That matters to an institution managing cash across time zones.

In the Gulf context, sukuk look like the logical candidate. They are a uniform priced asset with regulated issuers and custodians, which puts them in the category of funds that worked rather than property that stalled.

The biggest illusion: liquidity

The most heavily sold promise in this field is liquidity, and it is the weakest part of it. Splitting a building into ten thousand tokens makes buying possible with a small amount. It does not create a buyer for those tokens when you want out.

Fractional ownership (الملكية المجزأة) lowers the entry barrier. It does not create a market. A market needs another party willing to buy at a reasonable price, and that requires a market maker, a redemption window the issuer commits to, or a regulated secondary market. Without one of those three, you own a small share of an illiquid asset, and you have added the difficulty that it is in an unfamiliar form.

Oracles and the data problem

A tokenised product needs data from outside the chain: the asset's value, the distribution date, the occupancy status. Whatever delivers that data is called an oracle (الأوراكل).

A risk many people miss appears here. If a distribution depends on a number arriving from a single source, that source becomes a financial point of failure rather than a cosmetic one. And proving the property still exists and has not been pledged twice is not solved by a refresh button in the app. It is solved by an off-chain audit done by people.

Five questions before you believe any pitch

Ask exactly what legal right the token represents. Then who holds the asset and who manages it. Then how cash reaches token holders, and how often. Then who decides if the official registry and the chain disagree. Then who buys from you when you want out.

In Saudi Arabia the CMA is the starting point when the right resembles a security or a collective investment offering. Function is what gets classified, not form. If a pitch cannot answer those five questions in short clear sentences, the product is not ready however elegant the technology behind it.