Key takeaways from the Abu Dhabi Finance Week panel discussion in December.
At Abu Dhabi Finance Week 2025, discussions around capital efficiency consistently returned to the same question: is the current market infrastructure really designed to support it?
During a panel focused on building the rails of tokenized leverage, Redwan Meslem, Executive Director of the Enterprise Ethereum Alliance, joined leaders from the insurance, clearing, custody, and trading industries to unveil what really lies between tokenized collateral and institutional-scale adoption.
The conversation quickly moved beyond the importance of tokenization and instead focused on how, where and under what constraints it could be integrated into leverage, credit and liquidity frameworks.
Tokenized guarantee is more than a technical question, it is a system question
In the areas of insurance underwriting, central counterparties and custody, panelists converged on one reality: guarantees lie at the intersection of risk management, legal certainty and operational control.
From an insurance perspective, tokenized assets are under immediate scrutiny on four fronts: stability, legal clarity, transparency and regulatory acceptance. Even with hundreds of billions deployed globally in fiat collateral, crypto collateral remains marginal – not because of liquidity constraints, but because regulators still lack confidence in applicability, valuation standards, and custody models.
Clearing and derivatives infrastructures have echoed this view. CCPs do not evaluate collateral from a “crypto vs TradFi” perspective, they evaluate whether assets can be reliably valued, allocated by account, mobilized 24/7 and liquidated without introducing systemic risk.
In this context, tokenization is about shortening settlement cycles and reducing exposure to counterparties in markets that already operate 24 hours a day.
Control matters as much as ownership
Custody brought the discussion into greater focus. Title is not enough to make an asset usable as collateral if control cannot be exercised in real time.
Andrej Majcen of Bitcoin Suisse summed up the custody challenge succinctly: “Not your keys, not your coins. » When the value of collateral changes rapidly, the ability to act instantly is important, and complex custody or authorization structures can hinder enforceability when it is most needed.
This is where tokenized assets face their first real institutional stress test, not in terms of issuance, but in terms of application under pressure.
Interoperability is the real key to success
When the conversation turned to interoperability, Redwan’s point was clear: tokenization without connectivity simply recreates the silos of traditional, on-chain finance.
“There is no technical problem we cannot solve,” he stressed, but interoperability only creates value if it enables capital velocity, not fragmentation. Tokenized assets must be able to move between locations, communicate with existing systems, and remain composable in clearing, settlement, and collateral management workflows.
Standards are starting to emerge – including ERC-based frameworks that are gaining traction for compliant tokenization – but Redwan emphasized that standards alone are not enough. The real work happens when engineering design is informed by business reality.
Too often, crypto conversations, especially institutional ones, remain focused first and foremost on engineering. Institutional adoption, on the other hand, requires translating these standards into linguistic texts that risk committees, compliance teams and treasury departments can act on.
Regulation: equivalence on innovation
One of the more quiet, yet crucial, ideas from the panel was the role of regulatory equivalence.
Global markets work because jurisdictions recognize that their respective regulatory regimes are comparable. Tokenized collateral will not be able to scale globally unless similar equivalence arises, not only between countries, but also between types of institutions. Banks have long acted as trusted intermediaries when it comes to guarantees. Native token custodians must ultimately be recognized as having comparable fiduciary, compliance, and oversight standards so that regulators feel comfortable.
“Having recognizable parity and equivalent regimes is essential”said Sabrina Wilson of GFOX, emphasizing that it is regulatory equivalence, not novelty, that allows global markets to operate at scale.
This theme was reinforced on the insurance side by Helen Ye, CEO of Qubit Underwriting, who highlighted a different – but related – gap: “How can we actually have an equivalently regulated entity as credibly as the banks… for the regulators to say, ‘Yes, we accept that’?”
From the European MiCA framework to regional experimentation in the Middle East, regulatory certainty, even imperfect, proves more catalytic than regulatory silence.
From “code we trust” to institutional trust
Redwan concluded with a framing that strongly resonated with the financial public: “We trust the code” is not enough when systems touch the real economy.
Ethereum and the broader ecosystem are no longer in their infancy. Privacy standards, interoperability frameworks, and enterprise tools are evolving rapidly, but progress depends on sustained dialogue between vendors and institutions, not side conversations.
The future of symbolic guarantees will not be decided by a single protocol or jurisdiction. It will be shaped by how effectively standards, regulations and infrastructure converge around shared risk models.
Looking towards 2030
By the end of the session, the panel aligned with a pragmatic perspective. Tokenized collateral is unlikely to replace traditional systems overnight. Instead, it will become another increasingly important tool within institutional toolboxes.
The real transformation lies in speed: faster settlement, reduced counterparty risk and more efficient use of capital in the markets. If these benefits materialize, tokenization will go beyond simply modernizing collateral: it will quietly redefine how leverage, credit, and liquidity are structured across the entire financial system.
And as Redwan suggested, once interoperability and trust are in place, the range of assets that can participate could expand far beyond today’s imagination – from financial instruments to real value itself!
