Dubai has taken another leap toward becoming a global leader in digital finance, this time by establishing clear ground rules for tokenizing real-world assets (RWAs). With the recent update to its regulatory framework, the emirate isn’t just talking about innovation — it’s putting pen to paper and enabling real, regulated applications in one of crypto’s most anticipated sectors.
New Guidelines Bring Tokenized Assets Into Focus
On May 19, Dubai’s Virtual Asset Regulatory Authority (VARA) rolled out a refreshed version of its Rulebook for virtual asset service providers (VASPs). This comprehensive update includes key provisions around RWAs, offering long-awaited clarity on how these digital representations of physical assets can be issued, traded, and regulated in the emirate.
Market participants now have a one-month window — until June 19 — to align with the updated regulations. One of the most significant takeaways from this overhaul? RWA tokenization is officially recognized and regulated in Dubai.
RWA Tokenization Goes From Concept to Compliance
According to Irina Heaver, a partner at NeosLegal and a prominent lawyer in the UAE crypto scene, the updated rules are a major step forward. Speaking to Cointelegraph, Heaver emphasized that what was once theoretical is now fully grounded in law.
“Issuing real-world asset tokens and listing them on secondary markets is no longer just a concept,” she explained. “It’s now a regulatory reality in Dubai and the broader UAE.”
Heaver compares RWAs to the short-lived wave of Security Token Offerings (STOs), which tried — and largely failed — to merge traditional finance and blockchain back in 2018–2019. STOs stumbled primarily due to regulatory fog, weak market infrastructure, and a lack of investor interest.
RWAs, however, appear to be getting a second chance — and this time, the rules are far clearer.
VARA’s Rules Lay the Groundwork for Institutional Adoption
Heaver pointed out that Dubai’s updated framework classifies RWAs under a specific category known as Asset-Referenced Virtual Assets (ARVAs). These tokens are defined by their connection to real-world assets, whether through direct ownership, stable value references, or collateralization. ARVAs can even include wrapped or fractionalized versions of the underlying asset.
Unlike other jurisdictions — such as Switzerland — where token issuance is allowed but secondary market trading remains in legal limbo, Dubai’s VARA has authorized both. Regulated exchanges and broker-dealers can now list and trade ARVA tokens with regulatory backing, marking a crucial milestone for broader adoption.
“VARA’s updated Virtual Asset Issuance Rulebook tackles past barriers head-on,” Heaver said. “It sets the stage for Dubai’s regulated exchanges to fully participate in the RWA ecosystem.”
Requirements for Issuers: Clarity With a Capital Commitment
The path to launching ARVA tokens in Dubai comes with its own set of criteria. Issuers must secure a Category 1 Virtual Asset Issuance license and provide detailed documentation, including a white paper and a risk disclosure statement. Financial requirements are also in place: companies must show a paid-up capital of 1.5 million AED (approximately $408,000) or 2% of their reserve assets, whichever is higher.
Monthly audits and ongoing regulatory supervision further ensure transparency and accountability — two key pillars often missing in past tokenization efforts.
A Turning Point for Tokenization
Dubai’s latest move is more than just regulatory housekeeping — it signals a tangible shift in the global tokenization landscape. By laying down clear, enforceable rules, VARA is not only inviting innovation but ensuring that it’s built on solid ground.
As Heaver puts it, “This matters because it marks a shift — from theory to execution, from fiction to framework.”
With the legal groundwork now in place, Dubai is poised to become a hub for the next big wave in digital finance — one where real-world assets find a secure and scalable home on the blockchain.
4o
