‘Suboptimal Capital Leakage’ in GCC Due to Lack of Crypto ETPs, Warns Defi Tech President

CN
2 hours ago

In a market where bitcoin ( BTC) and other digital asset exchange-traded products (ETPs) are experiencing soaring popularity among institutional and retail investors, a notable gap has emerged in the Gulf Cooperation Council (GCC) region. According to Andrew Forson, president of Defi Technologies and chief growth officer for Valour, the company’s ETP division, this represents a significant missed opportunity.

While Valour has a portfolio of 78 regulated and liquid digital asset ETPs listed on premier exchanges across Europe—including the London Stock Exchange, SIX Swiss Exchange and Euronext—Forson points out that none are currently listed in the GCC. He argues that this absence causes the region to fall behind by failing to provide investors with regulated, locally listed access to digital assets. As a result, local corporations and individuals are simply establishing brokerage accounts outside the GCC, “effectively exporting their capital to jurisdictions that offer these instruments.”

“This represents a suboptimal leakage of capital,” Forson said, highlighting not only the financial loss but also the missed opportunity to build crucial “underlying innovative infrastructure and liquidity that originates through market making operations that comes with the listing of Valour ETPs.”

To address this, Defi Technologies has a clear strategy: to invest in the region and bring Valour ETPs to securities exchanges within the GCC. As reported by Bitcoin.com News, the Nasdaq-listed company has already established an office in Dubai and opened a dedicated trading desk in the Dubai Multi Commodities Center (DMCC).

Forson told Bitcoin.com News that the demand for digital asset ETPs and exchange-traded funds (ETFs) from GCC investors is “significant” and that he views this asset class as an increasingly necessary component of a balanced portfolio. However, he warns that digital assets are already being traded through “unregulated vectors,” regardless of government policy. He cautioned that failing to list ETPs on local exchanges pushes business offshore, along with “all the ancillary services and learnings that come with local sourcing of structured instruments.”

Furthermore, Forson explained the dangers of unregulated markets, where “quality products are mixed with illicit copies, meme tokens, and other instruments that are not necessarily investment grade.” He said that investing in digital assets via ETPs eliminates such errors because Valour ETPs are identified by an International Securities Identification Number (ISIN), ensuring professional and institutional investors access the correct, approved instrument.

Forson also talked up Valour’s ETPs, which he says provide “regulated access to single instrument digital assets as well as baskets of digital assets.” The core of this strategy lies in the fact that Valour ETPs are not classified as digital assets themselves. Instead, they are designed as conventional financial products—similar to a fund or corporation—that are traded on securities exchanges and represent investments in digital assets. This important distinction exempts them from virtual asset-specific regulations, placing them fully under the jurisdiction of local financial authorities.

This structure is particularly advantageous for institutions that are unable to directly hold digital assets due to their mandates. By investing in ETPs, they can gain exposure to assets like BTC, gold or even real-world assets without the complexities of navigating virtual asset regulations. For Forson, this makes ETPs a secure, familiar and compliant vehicle for traditional finance and the digital asset world to coexist.

The Defi Technologies president anticipates significant interest in diversified and specialized digital asset ETPs, particularly in altcoins, tokenized real-world assets (RWA) and other asset classes. He reveals that Valour is already developing a range of these new products, which will be made available first to exchanges that have already established a relationship with Defi Technologies and Valour.

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