Escalating conflict and higher oil prices have raised questions about the Gulf’s position as a leader in tokenized finance.
Some experts say the Gulf is still at the forefront, with the United Arab Emirates showing particular strength through regulated use cases already in the market.

Conflict in the region has shuttered some offices and shifted firms’ near-term priorities.

However, Robert Farquhar, CEO for MENA at Ctrl Alt, said the region’s overall push into tokenization remains intact.
“Tokenization in the region was initially driven by objectives around innovation, access and market efficiency — opening up new asset classes… and modernizing capital markets,” he said.

“Disruptions to physical infrastructure, including data centers, have highlighted how dependent traditional financial systems can be on centralized architecture,” Farquhar added that the direction hasn’t changed, but it has prompted more thought about how tokenized systems are designed.

A number of new regulatory requirements around tokenisation and stablecoin usage have come into effect in the Middle East this year. The Financial Services Regulatory Authority (FSRA) introduced a regulatory framework for the issuance of Fiat-Referenced Tokens (FRTs) in the Abu Dhabi Global Market (ADGM) in December, 2025, which expanded the range of digital assets that can be offered.

Additionally, in January, the Dubai Financial Services Authority (DFSA) updated its rules on the regulation of crypto tokens in the Dubai International Financial Centre (DIFC). The updated rules require firms to determine whether crypto tokens meet the DFSA’s suitability criteria.

Oscar Asly, group CEO of M4Markets, said: “That combination matters because it shows the region” is moving beyond promotion and into such areas as market structure, investor protection, and custody.

The Middle East still appears to be leading, at least for now.

Both Asly and Farquhar said the Middle East remains a leading region, and continues to set the pace for institutional adoption.
“It is not enough to say the region is ahead because it is open to innovation,” Asly said. “The more important point is that parts of the Gulf have been better at turning policy intent into regulated activity you can actually see. What has changed is that the lead is narrower, and the next stage will be decided by scale, secondary liquidity, and institutional adoption, not by who had the earliest narrative.”

He added that Singapore and Hong Kong are the most likely challengers, thanks to MAS's Project Guardian in Singapore and Hong Kong’s recent moves on stablecoins and dealer licensing.

Farquhar said: “The competitive landscape is evolving. The U.S. and parts of Europe are advancing,” supported by deep capital markets that could drive tokenisation at scale.

What increasingly matters is not early adoption, but execution.

The Middle East remains a leader, but its advantage is narrowing as competition intensifies.