GIFT City Preparing for Tokenization of Real World Assets
GIFT City, Gujarat’s international financial services center (IFSC), is set to launch its first regulated tokenization platform for real-world assets (RWA) in January 2024. This initiative positions GIFT City as a potential competitor to established financial hubs like Singapore and Dubai.
Real Estate to Lead Tokenized Asset Classes
A spokesperson for the GIFT City regulator, the IFSCA, announced that real estate would be the first asset class to be tokenized. Future plans include tokenizing assets like art, aircraft, and ships. This development is expected to attract more foreign investors to fund various projects within GIFT City.
Collated and Terazo’s Collaborative Effort in Blockchain Fintech
The team behind the real estate development firm Collated has established a separate blockchain fintech, Terazo, dedicated to asset tokenization on the Polygon blockchain. Terazo, which is part of the GIFT City sandbox, will also provide a marketplace for these tokenized assets. The Alternative Investment Fund (AIF) in GIFT City will be utilized to structure these investments.
First Real Estate Tokenization Venture
In collaboration with the Savvy Group, Collated aims to raise $7 million through its first real estate tokenization venture within the GIFT City Special Economic Zone (SEZ). However, this opportunity is not entirely open to retail investors; it is limited to an approved list of eligible investee countries and investors with a minimum net worth of $150,000.
Inclusivity and Accessibility in Private Market Investing
Shaan Zaveri from Tezaro and Collated noted that while tokenization is occurring in other Indian cities, these investments remain unregulated. Terazo’s mission is to make private market investing more inclusive and frictionless, offering secondary investors the chance to invest with as little as $1,000.
Tokenized Cash Pilot in GIFT City
In addition to asset tokenization, GIFT City is piloting tokenized cash. JP Morgan has provided the tokenization solution through its Onyx JPM Coin blockchain-based bank accounts. This pilot involves tokenized U.S. dollars used for settling Rupee forex derivative contracts by five GIFT City banks, enabling dollar transactions outside traditional U.S. banking hours.