How To Launch An RWA Tokenization Project In Dubai In 2025

VARA CEO Matthew White discussed the need for harmonized regulations at Hong Kong Fintech Week 2024

Virtual Assets Regulatory Authority Real-world asset (RWA) tokenization is evolving from early security token offering (STO) experiments into a mainstream financial trend, and Dubai is leading the regulatory charge. With a newly introduced framework for issuing and trading asset-referenced tokens and political will to embed virtual assets into the capital markets, Dubai has great potential to become a global hub for asset issuers looking to tokenize everything from real estate and commodities to art and intellectual property.

Despite years of industry enthusiasm, the first wave of STOs largely failed, not due to lack of vision, but because most jurisdictions lacked the legal infrastructure to support them. There was minimal clarity on how tokenized assets should be issued, and most importantly, there were no functional secondary markets, which also required a legal base to exist.

This was a proverbial catch-22 that Dubai has just solved. With the release of an updated virtual assets issuance rulebook by the Virtual Assets Regulatory Authority (VARA), RWA tokenization has shifted from concept to execution.

For the first time globally, there is a truly end-to-end framework, governing issuance, custody, and trading, that allows RWA products to be launched, distributed, and scaled within a clear and enforceable regulatory perimeter.

As Matthew White, CEO of VARA, confirmed to me in a recent conversation: “The tokenisation of real-world assets is a policy priority for VARA, we see it as the foundation for a new kind of financial system, reflective of Dubai’s broader ambition to be a leading global centre for digital finance under the D33 economic agenda.”

MORE FOR YOU## The Timing And The Infrastructure Finally Align

Beyond regulatory clarity, Dubai’s momentum in RWA tokenization is being fuelled by global shifts in capital markets and investor appetite for transparency, efficiency, and broader access. As institutional interest grows and infrastructure matures, tokenized real-world assets are becoming the natural convergence point between traditional finance and technology innovation.

“Tokenization can unlock liquidity and create new capital flows, but only if done right,” explains Juliet Su, Managing Partner of NewTribe Capital. “In the UAE, the regulatory frameworks are in place, but the success of a particular issuance depends on knowing what you are tokenizing, why you are tokenizing it, and how to plug into the right surrounding infrastructure. It’s not enough to just issue a token, it’s about aligning it with the market demand. That’s how we can unlock the trillion-dollar opportunity to bring real assets on-chain.”

This founder-first perspective is directly aligned with VARA’s policy stance, which emphasizes substance over symbolism. As White elaborated, the regulator is focused on approving RWA projects “where tokenisation offers clear, additive benefits, such as increased transparency, improved market efficiency, or broader investor access. Real estate has been an early focal point, not only because of its significance to Dubai’s economy, but also due to the tangible benefits tokenisation can unlock, from faster settlement cycles to expanded fractional ownership allowing for democratised access.”

This convergence of decisive public policy and economic relevance is what positions Dubai as a functional RWA jurisdiction.

Dubai’s RWA Tokenization Ecosystem Is Growing

A fast-growing ecosystem of regulated players is also an interesting development. From tokenization platforms and broker-dealers to custodians, legal advisors, auditors, and infrastructure providers, a full-stack market is quickly taking shape.

The new regulations are barely eight weeks old, yet we already see a coordinated movement of asset owners, regulators, and infrastructure builders working in tandem. The market is maturing fast, and the pace of new regulated platforms launches reflects the real momentum.

The chart below maps out the key players shaping Dubai’s RWA landscape, visually highlighting the nascent but rapidly expanding network. It offers founders and investors a clearer view of how to navigate the ecosystem and partner with the right stakeholders as they build and scale.

UAE RWA Tokenization ecosystem map

RWAlabs.ae## Which Real-World Assets Fall Under VARA in the UAE?

While VARA offers the most comprehensive regulatory framework for RWA tokenization in the UAE, it does not apply to all asset types. Understanding which assets fall under VARA regulations and which fall under the jurisdiction of other regulators is essential for any project considering a launch in the UAE.

Suppose you are tokenizing a traditional security, such as company shares, bonds, debt instruments, or oil futures contracts. In that case, your project falls under the jurisdiction of the Securities and Commodities Authority (SCA), the UAE’s federal securities regulator.

Likewise, any tokenized version of the UAE Dirham, being the only legal tender in the UAE, is regulated by the UAE Central Bank, which oversees the broader monetary policy and payment systems.

The UAE operates a multi-regulator virtual asset environment, with five distinct authorities: VARA, SCA, the Central Bank, and the financial regulators of 2 financial free zones operating under English common law. Each has its own licensing regime, asset classification, and enforcement powers.

Even the most seasoned founders can misjudge the boundaries of these regimes. That is why each project before launch should go through a regulatory assessment. For a detailed breakdown of how these authorities interact, the Chambers and Partners UAE Blockchain and Virtual Assets Legal Guide 2025 offers a valuableresource**.**

Legal Structuring Is Your Launch Strategy

Despite the presence of clear rules, launching an RWA project in Dubai is a complex process that requires nuanced legal structuring, capital adequacy, and strategic jurisdictional considerations.

“Founders often underestimate how jurisdictional complexity impacts go-to-market strategy,” says Anton Golub, a veteran builder and advisor to RWA Projects. “Whether you are launching as a broker-dealer, an issuer, or under a sponsored regime, your legal structure determines everything, from investor access to token liquidity.”

There is no one-size-fits-all approach. Launching an RWA project in Dubai requires founders to treat legal structuring and virtual asset service provider (VASP) licensing compliance as a core part of their product and capital formation strategy.

Any project seeking to issue, trade, or enable investment into tokenized real-world assets in or out of Dubai must obtain the correct VASP license and meet high standards around governance, custody, and investor protections. When I asked White about the regulatory philosophy behind RWA projects, he explained that VARA is not interested in imposing a single structure, but in ensuring that any offering, whether from a traditional financial institution or a Web3-native team, demonstrates clear compliance with the regulations and operational resilience. In his words, “Our objective is not to prescribe a singular architecture but to ensure every offering meets our clear standards for governance, custody, and transparency.”

That means founders must make structuring decisions early, before building out platform mechanics, product features, or taking investor funds. The rules of the game are known, and the Dubai’s virtual assets regulator expects participants to play like professionals.

RWA Tokenization licensing roafmap for founders

NeosLegal.co ## RWA Regulated Marketplaces High Entry Bar

For those building platforms that issue and trade tokenized assets, the highest regulatory standards are imposed. Such projects must obtain a broker-dealer or exchange license and Category 1 ARVA issuer license from VARA. These licenses grant control over the entire tokenization lifecycle, including primary issuance, secondary market trading, and beyond.

However, that level of licensing requires a significant degree of operational readiness. For Category 1 issuing license projects must meet the minimum capital requirements of AED 1.5 million, or 2% of the value of virtual assets held, whichever is higher. For a broker-dealer or exchange license, the capital requirements are up to 25% of fixed annual overheads, which can run into multiple of millions.

The entity must be domiciled in mainland Dubai or an approved Free Zone, such as the Dubai Multi Commodities Centre with their dedicated Crypto Centre, and must operate under the continued supervision of VARA.

A full compliance function is mandatory, including the appointment of a compliance officer, a money laundering reporting officer, and at least two executive directors. A physical office, robust cybersecurity systems, AML/KYC protocols, regular audits, and ongoing regulatory reporting are also required.

Licensing fees per category are AED 100,000 and AED 200,000 for annual supervision. The whole licensing process, including legal structuring and regulator engagement, typically takes nine months or more.

This path is not for faint-hearted builders. It's for serious operators who understand that tokenization is not just a technological upgrade, but a regulated product subject to scrutiny and accountability. As such, this raises a question of whether such highly prescribed rules will impede Web3-native innovation. However, White assured in our discussion, “We are testing where institutional-grade rigour must be enforced, and where flexibility can be introduced to accommodate emerging innovations. Web3-native platforms that can meet these benchmarks… are welcome participants in Dubai’s evolving virtual asset ecosystem.”

A case in point is Ctrl Alt, launched in May 2025. It is the first licensed real estate tokenization platform in the MENA region, allowing users to invest in fractional property shares starting from AED 2,000. Through its collaboration with the Dubai Land Department, Ctrl Alt has become a live demonstration of how Web3 native platform can bring real estate ownership on-chain without sacrificing regulatory integrity.

Sponsored Regime: Fast-Track Entry

Not every founder needs to begin with a full-stack license. For early-stage teams testing product-market fit, the ‘sponsored regime’ model offers a more accessible entry point. This structure allows startups to operate under the umbrella of an existing licensed VASP.

The advantages are clear. Founders can reduce initial costs, shorten their go-to-market timeline, and test real-world demand for their product, all while remaining under regulatory cover. While the responsibility for compliance, custody, and infrastructure remains with the sponsor VASP, the startup gains the ability to focus on product development and user adoption.

That said, this model is not a shortcut. Founders must still produce compliant documentation, maintain operational discipline, and align closely with their sponsoring entity. The sponsor ultimately controls the brand interface with regulators and users alike. For this reason, choosing the right VASP partner is one of the most critical strategic decisions a project can make.

A Model for RWA Asset Issuers

Asset owners, such as property developers, luxury asset managers, and commodities traders, who want to bring their holdings on-chain but do not intend to run a trading platform, can find a more focused solution in Dubai.

These projects can apply for a standalone Category 1 ARVA license for token issuance only. This leaner structure allows asset owners to legally issue tokens backed by real-world assets while outsourcing custody, trading, and settlement functions to third-party licensed platforms.

The process requires a detailed whitepaper, risk disclosures, governance protocols, and a full compliance team, which I believe to be an onerous requirement since RWA tokens can only be distributed via regulated broker-dealer or exchanges, that have own compliance policies and personnel. Perhaps this requirement is something where a flexibility can be afforded in the future by VARA.

The regulatory burden is arguably lighter than that of a broker-dealer. It is a more streamlined structure that allows each party to specialize - asset originators focus on creating yield and managing their products, while licensed brokers handle the distribution.

For companies that prefer not to engage in licensing efforts at all, there is also the option to outsource tokenization to regulated entities. By partnering with an existing holder of Category 1 licensed issuer, asset owners can tokenize under the partner’s license and infrastructure. The issuer manages legal compliance, smart contract deployment, and distribution channels, while the asset originator focuses entirely on capital formation and product delivery.

As Anton Golub described it to me, “We’re entering an era where tokenization becomes modular. You don’t need to control the whole stack. Asset originators can focus on sourcing yield, while licensed partners handle issuance, custody, and compliance. This specialization is what will allow RWAs to scale.”

Dubai’s RWA Tokenization Market Is Live

As of mid-2025, the total value of tokenized real-world assets on-chain has surpassed $25 billion, according to rwa.xyz. When stablecoins, tokenized representations of fiat, are included, that number exceeds $250 billion. However, this is just a sliver of the $800 trillion in global real-world assets, indicating that the market is still in its infancy.

Dubai stands out as one of the few jurisdictions where regulatory clarity, infrastructure, and capital formation converge. However, this market is not for the faint of heart, nor unprepared founders. With high regulatory, operational, and living costs, Dubai ranks as the seventh most expensive city globally. As a result, founders must carefully align their token design, legal architecture, and commercial model before launch to avoid wasting time.

“At a minimum, compliant tokenization projects must be able to demonstrate transparent disclosures, independent custody, real-time verifiability, smart contract integrity, and robust governance”, White noted. These are not aspirational guidelines; they are non-negotiables.

Dubai has done its part. Now it is time for builders to tokenize everything and trade it on chain, just like we ourselves prophesied back in 2018.

Disclaimer: I am a practicing crypto lawyer in the UAE. As part of my legal practice, I provided consulting to UAE government entities and relevant crypto companies.