Key Takeaways
- • Apex Group CEO Peter Hughes warned that the Senate's failure to advance the Clarity Act risks pushing digital asset business toward faster-moving jurisdictions in Asia, the Middle East and Bermuda, according to CoinDesk.
- • The Senate failed to pass the Clarity Act last month, falling short of the 60 votes needed in September amid disputes over ethics provisions, stablecoin rewards and other regulatory concerns.
- • Hughes described Europe's MiCA framework as slow to evolve and restrictive, and said Europe will not benefit from Washington's setback despite having its rules in place since July 1.
- • Saudi Arabia is emerging as a tokenization hub after opening its real estate market to digital assets and greater foreign investment, per Hughes and droppRWA CEO Faisal Monai.
- • Hughes cited a 5% return on a tokenized money market fund versus 3% on a bank savings account as a driver of institutional adoption, with tokenized funds also usable as collateral.
Summary
Apex Group CEO Peter Hughes said the U.S. risks losing digital asset business to Asia, the Middle East and Bermuda if it continues to delay crypto legislation or fails to establish a clear, certain regulatory framework, according to an interview with CoinDesk. Apex Group, which services more than $3.5 trillion in assets across 50 jurisdictions, is a Bermuda-based global financial firm.
The Senate failed to advance the Clarity Act last month. The bill would have set clearer federal rules for digital assets and divided oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It fell short of the 60 votes needed in September after disputes over ethics provisions, stablecoin rewards and other regulatory concerns. The SEC and CFTC have moved to propose their own crypto rules to fill the gap left by lawmakers.
Hughes said Europe will not capture the business either, criticizing the Markets in Crypto-Assets Regulation (MiCA), which has applied since July 1, as slow to evolve and restrictive. He pointed to Asia, the Middle East and Bermuda as jurisdictions moving quickly to build regimes for future financial products. He also suggested U.S. banks have shaped the debate around the Clarity and GENIUS acts to protect their position, particularly over concerns that stablecoin rewards could compete with traditional deposits.
On institutional adoption, Hughes identified tokenized money market funds as a major driver. He cited a comparison of 5% returns from a tokenized money market fund against 3% from a bank savings account, and said tokenized funds can be used as collateral, a use he said major banks are already examining. He expects regulated, yield-bearing stablecoins to become a tool for corporate treasuries if issuers meet requirements including reserve transparency, though he said timing is hard to judge: "Whether that happens in one, three, or five years, it's hard to judge." Hughes also expects tokenization to eventually reach retirement accounts and retail customers.
Faisal Monai, CEO and founder of tokenization platform droppRWA, said Saudi Arabia has already enacted regulatory changes allowing real estate tokenization and greater foreign participation in its property market. Earlier this month, Apex Group announced a partnership with droppRWA and Tokeny to turn real-world assets into regulated blockchain-based investment products, starting in Saudi Arabia. Monai said the remaining requirement is infrastructure linking each token to the legal record of the underlying asset, and predicted tokenization "will be the mainstream for capital moving into Saudi Arabia."
The Senate failed to advance the Clarity Act last month. The bill would have set clearer federal rules for digital assets and divided oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It fell short of the 60 votes needed in September after disputes over ethics provisions, stablecoin rewards and other regulatory concerns. The SEC and CFTC have moved to propose their own crypto rules to fill the gap left by lawmakers.
Hughes said Europe will not capture the business either, criticizing the Markets in Crypto-Assets Regulation (MiCA), which has applied since July 1, as slow to evolve and restrictive. He pointed to Asia, the Middle East and Bermuda as jurisdictions moving quickly to build regimes for future financial products. He also suggested U.S. banks have shaped the debate around the Clarity and GENIUS acts to protect their position, particularly over concerns that stablecoin rewards could compete with traditional deposits.
On institutional adoption, Hughes identified tokenized money market funds as a major driver. He cited a comparison of 5% returns from a tokenized money market fund against 3% from a bank savings account, and said tokenized funds can be used as collateral, a use he said major banks are already examining. He expects regulated, yield-bearing stablecoins to become a tool for corporate treasuries if issuers meet requirements including reserve transparency, though he said timing is hard to judge: "Whether that happens in one, three, or five years, it's hard to judge." Hughes also expects tokenization to eventually reach retirement accounts and retail customers.
Faisal Monai, CEO and founder of tokenization platform droppRWA, said Saudi Arabia has already enacted regulatory changes allowing real estate tokenization and greater foreign participation in its property market. Earlier this month, Apex Group announced a partnership with droppRWA and Tokeny to turn real-world assets into regulated blockchain-based investment products, starting in Saudi Arabia. Monai said the remaining requirement is infrastructure linking each token to the legal record of the underlying asset, and predicted tokenization "will be the mainstream for capital moving into Saudi Arabia."
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