Dubai Advances Real-World Asset Tokenization with New Rules

Dubai has taken a major step toward making real-world asset (RWA) tokenization a fully regulated and operational market. The city’s Virtual Asset Regulatory Authority (VARA) recently issued updated rules that officially permit the issuance and listing of RWA tokens on secondary markets, a development that legal experts say could transform the long-promised concept into a practical reality.

The updated Virtual Asset Issuance Rulebook, released on May 19, outlines a clear legal framework for tokenizing assets such as real estate, bonds, and other physical investments. Issuers and platforms have until June 19 to comply with the new requirements. According to UAE-based crypto lawyer Irina Heaver, these changes mark a pivotal shift, as real-world asset tokens can now be issued and traded legally within Dubai and the wider UAE market.

This regulatory clarity addresses past challenges faced by security token offerings (STOs) that struggled between 2018 and 2019 due to unclear rules and insufficient trading infrastructure. Dubai’s framework classifies these tokens as Asset-Referenced Virtual Assets (ARVA) and permits exchanges to list and trade them under stringent supervision. Unlike some jurisdictions such as Switzerland, where secondary trading remains uncertain, Dubai provides a comprehensive environment for both issuance and trading.

Issuers must hold a Category 1 license, produce a detailed white paper, and publish risk disclosures. They must also meet capital requirements of at least 1.5 million AED (around $408,000) or 2% of reserve assets, submit to monthly independent audits, and operate under continuous regulatory oversight. With these robust measures, Dubai is turning RWA tokenization from a theoretical idea into a structured, functioning market, positioning itself as a global leader in regulated digital asset innovation.