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Real World Tokenization in the UAE

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Tokenization

Updated: 20 July 2026

TL;DR: Tokenization of real-world assets (real estate, commodities, fund interests, securities) is legal in the UAE and regulated under one of four regimes - VARA, ADGM/FSRA, DIFC/DFSA, or the federal CMA - depending on the asset type and deal structure. The right choice of jurisdiction and legal structure (typically via an SPV) determines whether the token is classified as a virtual asset or a security, and which license is required. Below is an overview of all models, jurisdictions, and links to detailed breakdowns of each direction.

What Can Be Tokenized

VARA regulates 8 virtual asset activities. Each is discrete and must be applied for explicitly.

Real estate.

The most popular direction - fractional ownership of residential and commercial property in Dubai, either through the government-backed DLD pilot program or through a private SPV structure under a VARA license.

Detailed guide:

Commodities

Gold and other precious metals - a historically strong niche for the UAE, driven by DMCC's role as a commodities trading hub. Tokenized gold is typically structured as a token backed 1:1 by the physical metal.

https://amlzone.com/tokenization/commodities-uae

Fund interests

Tokenized units of collective investment funds are regulated in ADGM as Digital Securities (not as virtual assets) - a separate, more institutional regime

Detailed guide

Securities and debt instruments Tokenized bonds and equity instruments fall under the federal CMA regime or the DFSA Investment Token regime in DIFC.

Each of these assets can be tokenized using one of three legal models:

Direct title tokenization - the token is directly linked to the ownership right (available only in a limited way, mainly within the DLD pilot)
SPV-based tokenization - the token represents a share in a legal entity that holds the asset (the most common model in practice)
Future cash-flow tokenization - the token grants rights to rental income or revenue from the asset, without a direct stake in the asset itself

Jurisdiction	Regulator	Token Classification	Key Features
Dubai	VARA	Category 1 VA Issuance license - covers the issuance of ARVA (Asset-Referenced Virtual Asset, a token referencing a real-world asset) and FRVA (fiat-referenced stablecoins)	The updated Virtual Asset Issuance Rulebook came into effect on 19 June 2025; requires a VARA license, a whitepaper, and semi-annual reserve disclosures. See «VARA ARVA License» sub-page
Abu Dhabi	ADGM / FSRA	Digital Securities (for tokenized funds/SPV interests)	Regulated since 2018; tokenized fund units are classified as securities, not virtual assets
DIFC (Dubai)	DFSA	Investment Token / Crypto Token	Operates a Tokenisation Sandbox since 2025
Federal level	CMA (Capital Markets Authority)	Securities and commodity contracts	Decision No. 4/R.M/2026 (issued 13 February 2026) - CMA is the legal successor to the SCA under Federal Decree-Law No. 32 of 2025. Fully supersedes Decision No. 26/R.M/2023. Covers 8 licensed activities; capital set by a three-way test (highest of: fixed minimum / risk-based calculation / 25-35% of annual operating expenses). Hard prohibition on privacy tokens and algorithmic tokens. Coexists with VARA/DFSA/FSRA as a federal baseline, does not replace them.

Requirements Under VARA's Virtual Asset Issuance Rulebook, ARVA issuers must maintain paid-up capital equal to the higher of two amounts: AED 1,500,000, or 2% of the average market value of reserve assets over the preceding 24 months - a separate formula from the FRVA (stablecoin) requirement, where capital is calculated as AED 1,500,000 plus 2% of the circulating supply.

Tokenization pilot

In May 2025, the Dubai Land Department (DLD) launched a real estate tokenization pilot through the Prypco Mint platform - in partnership with VARA, the Central Bank of the UAE, and the Dubai Future Foundation, under the Real Estate Sandbox. Zand Digital Bank serves as the pilot's banking partner.
Current pilot conditions, per dubailand.gov.ae:

Minimum investment threshold - AED 2,000
No single investor may hold more than 20% of one property through tokens
Participation is currently limited to Emirates ID holders (expansion to foreign investors has been announced but not yet launched)
DLD projects the tokenized real estate market could reach AED 60 billion by 2033 (roughly 7% of all Dubai real estate transactions)

This is a government pilot initiative with limited participation, not an open mechanism available to any company. For most developers and investors today, the practical route is tokenization through a private SPV structure under a VARA license (Category 1 VA Issuance for ARVA issuance) or in ADGM (Digital Securities) - not direct participation in the DLD pilot.

Service

AML Zone

AML Zone supports the structuring of tokenization projects in the UAE: selecting the right jurisdiction and tokenization model, setting up the SPV, and preparing AML/KYC policies and licensing documentation (including the VARA whitepaper and Category 1 VA Issuance applications)

Frequently Asked Questions

REFERENCES

vara.ae - official VARA regulator
rulebooks.vara.ae - Virtual Asset Issuance Rulebook, Annex 2 (ARVA Issuance Rules)
adgm.com - ADGM FSRA Digital Assets framework
dubailand.gov.ae - Real Estate Tokenization Project
CMA Decision No. 4/R.M/2026 - federal virtual asset framework