The Dubai Virtual Assets Regulatory Authority (VARA) has formally brought real world asset (RWA) tokens under its regulatory remit. This marks a significant step forward in the institutionalisation of asset backed token issuance in the UAE.

With the release of Version 2.0 of its activity based Rulebooks on 19 May 2025, VARA introduced a first of its kind framework for Asset Referenced Virtual Assets (ARVAs). These are tokenised representations of real world assets – including real estate, commodities and off chain securities – long predicted to be a cornerstone of institutional adoption in digital asset markets.

Why this matters

The message is clear. Issuing RWA tokens in Dubai is no longer a regulatory grey area. ARVAs are now governed under Category 1 of the Virtual Asset Issuance Rulebook, requiring specific licensing and approval for each token launch.

This shift delivers much needed regulatory clarity – a key gap that hindered the 2018 to 2019 wave of Security Token Offerings (STOs), which failed to gain traction due to fragmented oversight, limited investor appetite, and the absence of viable secondary markets.

Under the updated framework, Dubai seeks to resolve these challenges with a robust set of safeguards. Requirements now include:

• Each ARVA must go through a formal approval process

• Segregated and audited reserves are mandatory

• Issuers must prepare a compliant whitepaper and meet strict disclosure obligations

• Ongoing obligations include monthly reporting, marketing controls, and regulatory supervision

VARA has granted a 30 day transition window for affected entities, with full compliance required by 19 June 2025.

Global context: The tokenisation race is gaining pace

The move brings Dubai in step with global momentum. Major financial institutions are accelerating their efforts in the tokenisation space, and the forecasts are striking:

• Citi expects tokenisation of financial and real world assets to reach 4 to 5 trillion US dollars by 2030, up from less than 100 billion US dollars today.

• Boston Consulting Group (BCG) estimates a 16 trillion US dollar opportunity by 2030, equivalent to 10 percent of global GDP.

• BlackRock, the world’s largest asset manager, has launched its first tokenised fund on the Ethereum blockchain – the USD Institutional Digital Liquidity Fund.

• JPMorgan, through its Onyx digital assets platform, is processing over 1 billion US dollars in daily transactions via JPM Coin, with live blockchain applications in repo markets and intraday settlement.

As adoption accelerates, Dubai’s new ARVA framework positions the city, and the broader UAE, as a leading jurisdiction for compliant tokenisation.

What this means for issuers

If your organisation is considering asset backed tokenisation, the path is now clearer – but regulated. VARA’s framework is extensive, requiring thorough preparation across legal, custodial, audit and governance areas.

At j. awan & partners, we support clients across the full regulatory lifecycle – from licensing strategy and regulatory engagement to compliance design and post approval assurance.

Considering issuing RWAs in Dubai?

Speak to our virtual assets regulatory team to explore your next steps.

Email: info@jawanpartners.com