Regarding digital currencies, tokenization, and Islamic bonds

Executive Summary:

The digital currency markets have witnessed significant developments after the global financial crisis in 2008, as trust in traditional financial markets declined. Market participants sought instruments that are not subject to regulatory frameworks established by securities regulators or central banks. The market capitalizations of these currencies reached record highs at times. The reasons for the lack of regulatory intervention to regulate these markets are due to several factors. Firstly, these regulatory bodies are not equipped, neither organizationally nor technically, to deal with the developments in these markets. Additionally, central banks were established to control paper and metal currencies and monitor banking activities, and their logic is centralized and cautious in making financial decisions. In contrast, the digital currency market is decentralized and transcends borders, and the manufacturing stages of these currencies are still unclear. Central banks should have the authority to track all stages of currency issuance. Therefore, central banks continue to deal cautiously with these currencies. On the other hand, their fluctuations are severe, and those dealing in them must be prepared for high possibilities of profit or loss because there is no logic in interpreting the behavior of these currencies. Moreover, the future of these currencies is surrounded by uncertainty.