Saudi Arabia Opens Capital Markets as QFI Exit Fuels Tokenization Push

Saudi Arabia is set to open its capital markets more widely than at any point in recent history. From February 1, the Kingdom will abolish its Qualified Foreign Investor framework, removing long-standing barriers that limited direct participation in the Tadawul to a narrow group of global institutions. The change follows the 2025 Investment Law and eliminates minimum asset thresholds of around $500 million alongside complex licensing rules. According to industry executives working closely with Saudi authorities, the reform signals a broader shift that extends beyond equities into how real-world assets could be issued, owned, and settled in the years ahead.

Key takeaways

Saudi Arabia will scrap the Qualified Foreign Investor regime on February 1, removing high asset and licensing requirements for foreign investors.

The reform is the largest single liberalization of the Tadawul to date and builds on the 2025 Investment Law.

Lower entry barriers are expected to increase daily participation from global investors rather than episodic inflows.

Executives close to policymakers argue the change reflects a deeper overhaul of financial market infrastructure.

Regulatory moves in real estate tokenization suggest Saudi Arabia is laying groundwork for large-scale real-world asset settlement.

Sentiment: Bullish

Price impact: Neutral. The reform reshapes market access and structure, with effects expected to play out gradually rather than through an immediate repricing.

Market context: The move comes as jurisdictions across the Gulf compete to attract long-term capital and experiment with tokenized market infrastructure under broader Vision 2030-style economic diversification agendas.

Why it matters

The abolition of the QFI framework removes a symbolic and practical barrier that has defined how international investors engaged with Saudi markets for more than a decade. By lowering thresholds, the Kingdom signals that foreign participation is no longer a privilege reserved for the largest asset managers, but a core component of its capital markets.

Beyond equities, the reform aligns with a wider push to modernize ownership, settlement, and enforcement across asset classes. Tokenization initiatives in areas such as real estate suggest regulators are thinking about market access and infrastructure as a single system rather than isolated policy changes.

For global investors and builders, the significance lies less in short-term flows and more in the emergence of a market that expects to be continuously priced and integrated into global portfolios, supported by modern legal and technical frameworks.

What to watch next

Initial changes in foreign participation levels on the Tadawul after February 1.

Further regulatory guidance following the 2025 Investment Law implementation.

Expansion or pilots of real estate token standards introduced by the regulator.

Signals from policymakers on how tokenized assets will integrate with existing settlement systems.

Sources & verification

Official announcements on the abolition of the Qualified Foreign Investor framework.

Text and implementation details of Saudi Arabia’s 2025 Investment Law.

Statements from the real estate regulator on its blockchain-based token standard announced in November 2025.

Public commentary from market participants working with Saudi authorities.

Opening Saudi markets and the implications for tokenization

Saudi Arabia’s decision to abolish the Qualified Foreign Investor regime represents a structural shift in howadul access rather than a marginal regulatory adjustment. For years, foreign institutions seeking direct exposure to Saudi equities faced minimum asset requirements of roughly $500 million under management, alongside an application process that favored only the largest global firms. From February 1, those constraints will no longer apply.

The change follows the passage of the 2025 Investment Law and is widely viewed as the most consequential liberalization of the Tadawul since its creation. By simplifying access, policymakers aim to transform the exchange from a market that international investors visit selectively into one that is monitored and priced on a daily basis.

According to Faisal Al Monai, chief executive of droppRWA, a tokenization platform working closely with Saudi government entities, the reform should be understood as part of a broader redesign of market infrastructure. In his view, eliminating the QFI gate is about reducing friction between global capital and domestic growth rather than merely increasing foreign ownership quotas.

Al Monai argues that the real significance becomes clearer when looking beyond equities. Over the past few years, Saudi regulators have focused on what he describes as the “plumbing” of the financial system, rethinking how assets are owned, transferred, and enforced. This approach contrasts with incremental reforms seen in other markets and reflects a willingness to rebuild core structures from the ground up.

A notable example came in November 2025, when the Saudi real estate regulator REGA announced a blockchain-based token standard for property. The move was positioned as a world first, establishing a formal framework for representing real estate ownership on distributed ledgers. While still in its early stages, the initiative sent a signal that tokenization is being treated as settlement infrastructure rather than a speculative overlay.

In that context, the opening of capital markets and the development of token standards appear interconnected. Lowering barriers to participation makes sense if ownership rights and enforceability are simultaneously strengthened at the market level. For proponents of real-world asset tokenization, this combination is essential for moving the concept from pilot projects to national-scale deployment.

Al Monai contends that when legal clarity and technical standards align, tokenized assets can deliver faster settlement, improved auditability, and reduced operational risk. These characteristics are particularly relevant in markets managing large volumes of real assets, from property to infrastructure, where traditional processes can be slow and opaque.

For international investors, the immediate impact of the QFI abolition may be subtle. Asset managers will need time to adjust internal processes, assess liquidity, and integrate Saudi equities into broader strategies. However, the long-term implication is a market that expects consistent global engagement rather than episodic interest tied to index inclusions or major listings.

The reform also reflects Saudi Arabia’s broader Vision 2030 agenda, which emphasizes diversification, private sector participation, and the modernization of institutions. By embedding these goals into market structure, rather than relying solely on incentives or promotional campaigns, authorities aim to create durable change.

There are, of course, open questions. How quickly foreign participation will increase remains uncertain, as does the pace at which tokenization standards will translate into live, widely used platforms. Coordination between regulators, exchanges, and technology providers will be critical to avoid fragmentation.

Still, the direction of travel is clear. By removing legacy barriers and investing in foundational infrastructure, Saudi Arabia is positioning its markets to operate on a scale and cadence comparable to established global exchanges. For investors and builders focused on the intersection of capital markets and tokenization, the Kingdom’s next phase will be difficult to ignore.

This article was originally published as Saudi Arabia Opens Capital Markets as QFI Exit Fuels Tokenization Push on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.