The Securities and Exchange Organization’s grant of Mazdax a capital market sandbox license for tokenizing Charisma funds is a positive step toward the applicability of blockchain technology.
With the collaboration of Mazdax and Charisma, a new development is taking shape.
The Securities and Exchange Organization’s granting of Mazdax, a capital market sandbox license for the tokenization of Charisma funds, represents a positive step towards the practical application of blockchain technology.
The Capital Market Sandbox Steering Council Secretariat recently announced that the plan for the tokenization of exchange-traded funds (ETFs) presented by Mazdak Financial Technology Development Company (Mazdax) and Charisma Financial Services Group was approved by the Supreme Council of the Stock Exchange. Although the status of digital asset trading platforms has not yet been fully recognized by the regulatory bodies, the fact that the Securities and Exchange Organization granted Mazdax a sandbox license to tokenize Charisma’s Kahra, Kara, and Leverage funds, in partnership with a financial institution, marks an important step forward for blockchain and cryptocurrency trading platforms.
We spoke with “Mohammad Ghasemi,” CEO of Mazdax, about this development. Ghasemi, who has been familiar with the concept of Bitcoin and blockchain since 2016, said: “Since 2017, I realized that Bitcoin is more than just electronic cash; smart contracts and financing are also possible in this field. Since then, we’ve been exploring leveraging it in the financial market. About two years ago, global trends in the capital market began shifting towards the tokenization of financial and non-financial assets. This led us to focus on this subject and participate in multiple meetings with the stock exchange. Once they understood the concept, the Securities and Exchange Organization and the Ministry of Economy supported us in moving in this direction.” Ghasemi stated that tokenizing assets’ primary benefit is enhancing blockchain’s applicability: “One of the biggest criticisms of Iran’s crypto market has been the lack of significant economic impact. The most common claim of crypto’s influence is that it allows circumvention of sanctions, but the actual impact in this regard has been limited, and some even link it to capital outflows. However, one of the biggest applications of blockchain is tokenizing fundamental assets rather than security or utility tokens. This initiative will enable the Iranian crypto industry to contribute meaningfully to the economy. It also allows individuals to buy and sell these tokens with crypto, though the stock exchange has yet to approve this aspect. We hope for future approval.”
Ghasemi emphasized the economic benefits of asset tokenization: “The foremost advantage of tokenization is liquidity. When assets can be traded on various platforms with instant settlement and global accessibility without current transfer restrictions, it can boost market liquidity by four to five times. Additionally, foreign investors can participate more easily than the stock market, which has fixed trading hours and specific days and requires transactions in rials, a process complicated by sanctions. In contrast, these platforms can operate without time constraints.” He added, “Our goal is that in the future, all companies and digital asset trading platforms can be recognized independently by regulatory bodies like the stock exchange without needing to partner with a financial institution. This would allow the market to grow much further. Nonetheless, the stock exchange’s approval of a partnership between a major financial entity like Charisma and Mazdax indicates recognition of blockchain’s legitimacy. As we address various issues, the role of these platforms could become more transparent.”
Kiarash Emamian, CEO of Charisma X, commented on Charisma Financial Group’s involvement in crypto: “At Charisma, we started research and development in crypto over two years ago and have invested in and developed various products. With the recent opportunity granted to us, we can now create a sandbox market where Charisma ETFs are tokenized and traded. This opportunity is significant for both Charisma and Mazdax. Mazdax will establish a trading platform on its website, while Charisma will set up a platform on Charisma X, allowing individuals to trade ETFs in tokenized form.”
He referenced the recent approval of Bitcoin ETFs in the U.S., adding: “In the U.S., they’ve allowed Bitcoin ETFs, but in Iran, we’ve taken a bolder step by allowing capital market assets to enter this space. Considering global trends, Iran has moved ahead of what’s been approved in the U.S. The path Iran has embarked on is more challenging and requires more courage, whereas the U.S. approach is less risky. Nonetheless, this market will also expand, and if we show significant progress within six months, we can anticipate additional assets entering this market with trading permissions granted by the Securities and Exchange Organization.”
The Americans brought crypto assets into the stock market, while in Iran, we introduced capital market assets into crypto, creating a platform where people can trade.
Emamian further explained the benefits of tokenizing capital market assets: “In this market, many of the restrictions of the primary market are removed. For example, in the main market, you can only trade a fund like Kahroba from 12 to 3 pm, but in crypto, you can access a 24-hour market. Additionally, while the stock exchange is closed on Thursdays and Fridays, this market is open seven days a week. Other lifted restrictions include the stock exchange’s permission to remove buy and sell queues, and we’ve set no limits on price changes. This means a fund can increase by 3% or 30%. Another feature is instant liquidity, which can address many challenges for fund managers and other market participants. You can enter the platform at previously unavailable hours, instantly cash out your assets, and leave the platform. We’ve also added high-credit leverage options to the platform.”
In response to whether this plan will attract interest from the capital market or crypto investors, Emamian said: “At Charisma, various teams are working on this, addressing the concerns of those involved in crypto, those who trade in the stock market, and the regulator. Although this project is currently in a sandbox phase, it has the potential for significant expansion, with more elements added and new concerns addressed. Meanwhile, we are committed to ensuring that all our activities comply with what the regulator has specified. Additionally, we can work closely with the regulator and, based on our agreements, add new assets, even those not yet listed on the stock exchange.”
