Dubai Issues Clear Rules for Real-World Asset Tokens

Dubai Regulator Clarifies Rules for Tokenized Real-World Assets

Dubai’s Virtual Asset Regulatory Authority (VARA) has issued updated guidelines that now provide clear regulatory pathways for issuing and listing real-world asset (RWA) tokens, marking a significant shift from theory to execution in the tokenization space.

On May 19, VARA released its updated Rulebook for Virtual Asset Service Providers (VASPs), setting a deadline of June 19 for compliance. The new framework explicitly outlines how RWAs can be issued and traded on regulated secondary markets in Dubai.

From Concept to Compliance

According to Irina Heaver, a UAE-based lawyer and partner at NeosLegal, the new rules mark the first time RWA token issuance and secondary trading have a fully defined legal framework in the UAE.

“Issuing real-world asset tokens and listing them on secondary markets is no longer theoretical. It’s now a regulatory reality in Dubai and the broader UAE,” said Heaver.

RWAs represent tokenized versions of tangible assets like real estate, commodities, or income-generating investments. The concept follows earlier efforts around security token offerings (STOs), which failed to gain traction in 2018–2019 due to a lack of regulation, secondary markets, and institutional interest.

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Dubai’s updated rulebook, however, addresses those gaps head-on, Heaver explained.

VARA Recognizes ARVA Tokens

Under the updated framework, RWAs fall under a new category called Asset-Referenced Virtual Assets (ARVA). These tokens are defined as representing ownership of real-world assets or income, or maintaining a stable value by referencing such assets. ARVAs can also include derivatives, wrapped or fractionalized versions of other real-world assets.

Regulated exchanges and broker-dealers in Dubai are now authorized to list and distribute ARVA tokens, offering a compliant and enforceable route for RWA tokenization.

Heaver contrasted this with other jurisdictions like Switzerland, where token issuance is allowed, but secondary trading remains in a legal gray area.

Issuer Requirements

To issue ARVA tokens in Dubai, projects must meet strict conditions:

• Category 1 Virtual Asset Issuance license

• Comprehensive white paper and risk disclosure statement

• Paid-up capital of 1.5 million AED (~$408,000) or 2% of reserve assets

• Monthly independent audits

• Ongoing regulatory supervision

These requirements are designed to ensure both consumer protection and institutional-grade transparency in the emerging RWA market.

“VARA is providing regulatory clarity, and it’s giving the industry a viable, enforceable path to turn the hype of RWA tokenization into reality,” Heaver said. “This marks a shift—from theory to execution, from fiction to framework.”

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Dubai continues to position itself as a global hub for regulated crypto innovation, with VARA’s latest move likely to attract more projects focused on real-world utility and tokenized assets.