Dubai offers tokenization sandbox to boost digital finance leadership
The Dubai Financial Services Authority (DFSA) has invited firms to express interest in joining its Tokenization Regulatory Sandbox before April 24, 2025.
In a March 17 announcement, the DFSA—an independent regulator overseeing the Dubai International Financial Centre (DIFC)—stated that the initiative targets firms looking to offer tokenized investment products and services.
The sandbox provides a controlled environment for testing tokenized financial solutions under regulatory supervision.
This initiative comes as tokenization gains traction worldwide. Data from Rwa.xyz shows that the real-world asset (RWA) tokenization market is valued at approximately $18.86 billion. The sector has seen over a 5% increase in users in the past month alone.
Who can participate?
The DFSA outlined that eligible services include tokenized equities, bonds, sukuk, and collective investment fund units.
Both existing DFSA-authorized firms looking to expand into tokenization and new applicants that meet the necessary requirements can apply.
Applications will be accepted from March 17 until April. Once submitted, firms will undergo an assessment process. Successful applicants will gain access to structured testing opportunities and tailored regulatory guidance within the sandbox.
According to the DFSA, only firms with strong business models and a solid grasp of regulatory compliance will be selected.
The initiative falls under the regulator’s broader Innovation Testing License program, designed to help companies refine financial products before full authorization.
UAE’s pro-crypto approach
The tokenization sandbox aligns with the UAE’s broader push to strengthen its position as a global leader in digital finance.
This month, the authorities approved a cross-border payment license for Ripple, a crypto payment firm. The license makes Ripple the first blockchain-based payment provider to receive regulatory clearance in Dubai’s financial ecosystem.
Outside of Dubai, Abu Dhabi has also taken steps to integrate stablecoins into its financial system, incorporating Tether’s USDT for broader institutional use.
Moreover, Coinbase and Chainlink have launched a joint initiative aimed at expanding institutional crypto adoption in the region.
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