Global technology network IOTA on Wednesday launched a $100-million foundation in Abu Dhabi to accelerate the growth of its distributed ledger technology (DLT) in the Middle East, aiming to help convert real-world assets into digital ones, said IOTA co-founder and Chairman Dominik Schiener.
DLT is similar to blockchain, a crypto technology whose potential applications has reached the hundreds since its inception more than 10 years ago. IOTA digital tokens will fund the investment.
The foundation provides another layer of support for a sector recently tainted by the collapse of major market players such as FTX and the fall from grace of Binance, once the largest crypto exchange. Optimism, however, has emerged on expectations that spot bitcoin exchange-traded funds (ETFs) will soon win regulatory approval.
The IOTA Ecosystem DLT Foundation is the first blockchain-focused organization approved by regulators of the Abu Dhabi Global Market (ADGM), the financial center of the United Arab Emirates whose blockchain rules were finalized in early November.
"The market right now is being reshuffled so we have a big opportunity to position ourselves by focusing on onboarding institutions, offering them to work on-chain because now it's more feasible to do that in the UAE," Schiener said in a phone interview.
The foundation will be seeded with over $100 million in IOTA tokens, to be vested over the next four years, Schiener said.
IOTA tokens on Tuesday traded at about $0.17, with a market capitalization of roughly $524 million, Coinmarketcap.com showed.
The funds will be used to develop the IOTA network and accelerate its growth, Schiener said.
IOTA will also start "tokenizing" assets, he said, a process in which ownership rights in land or buildings are represented as digital tokens and stored on a blockchain. The tokens are like digital certificates of ownership in almost any object of value.
Hamad Sayah Al Mazrouei, chief executive of the Registration Authority of ADGM, said that by welcoming IOTA to Abu Dhabi, the country seeks to position itself "as the leading jurisdiction for the blockchain industry."
IOTA was one of the fastest-growing networks after its launch in 2015, but its projects in Europe are mired in regulatory uncertainty. It has a foundation in Germany and existing blockchain projects with European government authorities.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Alden Bentley and Richard Chang)