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Business Centre, Sharjah Publishing City Free Zone, Sharjah, United Arab Emirates
Business Centre, Sharjah Publishing City Free Zone, Sharjah, United Arab Emirates
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Updated: 27 July 2026
TL;DR: Gold and other precious metals are a historically strong tokenization niche in the UAE, driven by DMCC's role as a global commodities trading hub. Since October 2025, DMCC and VARA have run a joint pilot programme for tokenizing gold, diamonds, and other high-value commodities, building on DMCC's existing Tradeflow platform for gold-backed digital assets.
Why Commodities, and Why the UAE
DMCC (Dubai Multi Commodities Centre) has positioned itself as a global hub for commodities trading for over a decade, with more than 1,500 companies operating in its gold and precious metals sector and over 700 Web3 firms based in its Crypto Centre. This existing infrastructure vaulting - refining, and trading relationships makes the UAE a natural base for commodity-backed token issuance.
The DMCC × VARA Commodity Tokenization Pilot
On 8 October 2025, DMCC and VARA announced a strategic partnership to build infrastructure and a regulatory framework for tokenized commodities. As of this writing, the initiative remains at pilot stage. Its stated aims are:
- Testing how gold, diamonds, and other high-value commodities can be securely tokenized and traded on blockchain infrastructure
- Evaluating technical and regulatory requirements, market viability, and investor protections
- Building on DMCC's Tradeflow platform, which already records ownership of physical gold bars held in approved vaults, as a technical precedent for tokenized commodity ownership
- Joint education initiatives and data-sharing between DMCC and VARA to inform future rulemaking
How Commodity-Backed Tokens Are Structured
Physical (or other commodity) is held in a licensed, audited vault or custody arrangement — DMCC's Tradeflow platform is a working example of this for gold.
Tokens are issued representing a 1:1 claim on a specific quantity of the underlying commodity.
Issuance falls under VARA's Category 1 VA Issuance framework — the same license category covering ARVA and FRVA tokens.
Monthly public disclosure of reserve holdings applies, together with an independent audit every six months, consistent with VARA's rules for asset-referenced tokens.
AML Zone Service
AML Zone advises on commodity token structuring, reserve/custody arrangements, VARA Category 1 VA Issuance applications, and AML/KYC frameworks for commodity-backed token issuers.
Frequently Asked Questions
Tokenized gold and other commodity-backed tokens fall under the same VARA Category 1 VA Issuance framework as other asset-referenced virtual assets (ARVA), requiring a license, whitepaper, and periodic reserve disclosures.
DMCC has an established commodities trading and vaulting infrastructure, particularly for gold, including its existing Tradeflow platform, which provides a practical technical precedent for token issuers.
Not yet as a standalone category. DMCC and VARA are jointly running a pilot programme (announced October 2025) to test the model before any dedicated framework is finalized. Issuance in the meantime proceeds under VARA's existing Category 1 VA Issuance rules.
The DMCC-VARA pilot explicitly covers diamonds and other high-value commodities in addition to gold.
Both fall under VARA's Category 1 VA Issuance (ARVA) framework, so the same capital formula applies: the higher of AED 1,500,000 or 2% of the average market value of reserve assets over the preceding 24 months.
REFERENCES
- dmcc.ae - DMCC and VARA Forge Landmark Partnership to Accelerate Tokenisation of Commodities (8 October 2025)
- rulebooks.vara.ae - Virtual Asset Issuance Rulebook
- vara.ae - official VARA regulator
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Please note: We do not provide any personalized investment advice, token selection guidance, or transaction recommendations. AMLzone is a compliance consultancy and project management services provider, not a Virtual Asset Advisor.
Please note: We do not provide any personalized investment advice, token selection guidance, or transaction recommendations. AMLzone is a compliance consultancy and project management services provider, not a Virtual Asset Advisor.