Three months into 2025, you would be forgiven for thinking that “AI” is the year’s biggest buzzword. However, in certain circles, another term is quickly gaining traction: “tokenisation”.
This emerging category of ownership involves converting real-world assets into digital tokens that can be bought and sold, typically on a blockchain.
The global tokenisation market is rapidly growing. In 2023, it was valued at around $600 billion and is projected to grow at a compound annual growth rate of 40 percent from 2024 to 2032.
What began with money market funds and bonds has evolved into a broader trend.
Now, it seems almost anything can be tokenised. From real estate to racehorses, music royalties to season tickets, the list is rapidly expanding.
Take last weekend’s Dubai World Cup, one of the most glamorous events on the global horse racing circuit. The main race was clinched by Hit Show, earning the horse a $7 million prize.
While historically it has been possible to own a share of a racehorse via a syndicate, tokenisation has made buying a fraction of a horse much simpler, and potentially more lucrative.
Digital tokens are created on the blockchain, which means they are far more transparent and easier to buy, sell and trade – like shares in a company.
When I spoke recently to Matt Blom, the co-founder of the UAE-regulated fractional investment specialist Tokinvest, he told me he was getting ready to launch a racehorse tokenisation scheme.
The minimum investment is around AED1,000 ($270), a lot less than you would pay to be part of a syndicate – albeit there will be far more fractional owners to share the prize money.
In theory, if a victorious horse like Hit Show is tokenised, the winners will be able to see exactly where the $7 million prize money goes and earn a share of the proceeds via the digital syndication model. With traditional syndicates, you don’t always get to see how the winnings are distributed.
Plus, novice owners do not want to manage a horse day-to-day, and racing managers do not want to answer to every fractional owner – so it’s a win-win.
Not everything in the garden is rosy, though. Earlier this week, Dubai-based Mantra, a platform which tokenises real work assets and which had formed partnerships with developers MAG and Damac, crashed, losing billions in value.
Nonetheless, it is a clear sign of where tokenisation is heading: turning high-value assets into accessible investments, with the transparency and efficiency that come with the blockchain.
The DLD believes that real estate tokenisation could account for 7% of Dubai’s total real estate transactions, worth $16bn by 2033
The Dubai property market could also be set to benefit from tokenisation. The Dubai Land Department (DLD) recently announced it is giving the sector a potential boost with its new real estate tokenisation project.
In collaboration with the Dubai Virtual Assets Regulatory Authority and the Dubai Future Foundation, the DLD is launching a pilot phase aimed at transforming property ownership by converting real estate assets into digital tokens using blockchain technology.
The DLD believes that real estate tokenisation could account for 7 percent of Dubai’s total real estate transactions, with a market value projected to reach AED60 billion (approximately $16 billion) by 2033. It’s hardly pocket money.
Specific details regarding the value of properties to be tokenised during the pilot phase have not been disclosed. However, the project’s primary objective is to diversify property ownership by enabling multiple investors to co-own properties through tokenised assets.
Unlike crowdfunding, which grants investors access to the real estate market with small investments through digital platforms, tokenisation offers a distinct and more structured model for real estate investment.
If it works, DLD’s tokenisation project could become a global case study of how cities reimagine real estate in the age of digital assets.
While other regions have explored property tokenisation, such as the St Regis Aspen Resort, a luxury hotel in Colorado, which was partially tokenised using blockchain, none has done so on the scale Dubai is pursuing.
Rather than focusing on individual assets, Dubai is looking at transforming the entire real estate market.
The DLD may also tokenise documents such as title deeds, to streamline the process even further.
If the DLD’s top objective is to diversify property ownership and democratise it, will everyday folk be able to get their heads around tokenisation and not see it as some sort of risky crypto play?
Episodes like that of Mantra’s OM coin will surely not assuage their concerns. The coin, designed to tokenise real-world assets, recently lost 90 percent of its value overnight, and now accusations of nefarious activity are flying as the coin’s losers seek to assign blame.
Or will only the wealthy and financially astute spot this opportunity, giving them a diversified property portfolio?
It is too early to say. However, tokenisation will change how we own things, enabling simpler, more efficient exchanges. It will also give a wider audience the chance to shift from fans to shareholders.
Justin Harper is an award-winning business journalist and editor with more than 20 years of experience in London, Singapore and Dubai
