Dubai regulator clarifies real-world asset tokenization rules: Lawyer
Newly updated guidelines from Dubai’s crypto regulator include provisions on real-world asset (RWA) tokenization and clarify rules for issuers.
On May 19, Dubai’s Virtual Asset Regulatory Authority (VARA) released its updated Rulebook for virtual asset service providers (VASPs) operating in the region. The regulator gave market participants until June 19 to comply with the new rules.
The regulator previously told Cointelegraph that it had enhanced supervisory mechanisms and brought consistency across activity-based rules. One of the more prominent changes includes regulatory clarity on RWA tokens.
Irina Heaver, partner at the United Arab Emirates-based law firm NeosLegal, told Cointelegraph that the updated rules clarify RWA issuance and distribution.
“Issuing real-world asset tokens and listing them on secondary markets is no longer theoretical,” Heaver told Cointelegraph. “It’s now a regulatory reality in Dubai and the broader UAE.”
A “viable” path to realize RWA hype
Heaver compared RWAs to security token offerings (STOs), an earlier attempt from the crypto space to tokenize securities like stocks, bonds and real estate investment trusts. However, the UAE crypto lawyer said that STOs “died a peaceful death in 2018 to 2019.”
The lawyer told Cointelegraph STOs did not work out because of the lack of regulatory clarity, viable secondary market trading venues, institutional investor appetite and liquidity.
Still, the situation is different for RWAs. Heaver told Cointelegraph that RWAs are the next foundational layer for institutional adoption of blockchain and virtual assets. Heaver said that VARA’s new rules already cover them as Asset-Referenced Virtual Assets (ARVA) tokens. She said:
“VARA’s newly updated Virtual Asset Issuance Rulebook (May 2025) addresses these failures head-on. Regulated exchanges and broker-dealers in Dubai are now authorized to distribute and list ARVA tokens.”
The lawyer said this solves an issue in jurisdictions like Switzerland, where token issuance is possible, but listing and secondary trading remain unregulated.
Related: Dubai gov’t agencies to link real estate registry with property tokenization
Lawyer shares requirements for RWA issuers
Heaver said ARVA tokens are defined under Dubai law as representing direct or indirect ownership of real-world assets, granting entitlement to receive or share income and purporting to maintain a stable value by reference to real-world assets or income.
ARVA tokens are also backed or collateralised by such real-world assets or constitute a derivative, wrapped, duplicated, or fractionalised version of another ARVA.
The lawyer said issuers must meet specific requirements, including a Category 1 Virtual Asset Issuance license, a comprehensive white paper and a risk disclosure statement.
In addition, issuers must have a paid-up capital of 1.5 million UAE dirhams (about $408,000) or 2% of reserve assets held. The issuers are also subjected to monthly independent audit obligations and must adhere to ongoing supervisory oversight.
“VARA is providing regulatory clarity, and it’s giving the industry a viable, enforceable path to turn the hype of RWA tokenization into reality,” Heaver told Cointelegraph. “This matters because it marks a shift, from theory to execution, from fiction to framework.”
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The prime minister’s spokesman has refused eight times to confirm whether recognition of Palestine could go ahead if Hamas remain in power and the hostages are not released.
Keir Starmer’s spokesman was questioned by journalists for the first time since the announcement last week that the UK will formally recognise the state in September – unless Israel meets certain conditions including abiding by a ceasefire and increasing aid.
The policy has been criticised by the families of UK hostages, campaigners and some Labour MPs, who argue it would reward Hamas and say it should be conditional on the release of the remaining hostages.
A senior Hamas politician, Ghazi Hamad, speaking to Al Jazeera, said at the weekend that major nations’ decision to recognise a Palestinian state “is one of the fruits of 7 October”.
Gaza latest: Trump pressed to recognise Palestinian state
The PM’s spokesman said on Monday: “The PM is clear that on 7 October, Hamas committed the worst act of terror in Israel’s history. That horror has continued since then.
“As the foreign secretary said over the weekend, Hamas are rightly pariahs who can have no role in Gaza’s future, there is a diplomatic consensus on that. Hamas must immediately release all hostages and have no role in the governance of Gaza.”
But asked whether removing Hamas from power and releasing hostages were conditions for statehood, he said a decision on recognition would be made at the UN General Assembly meeting in September, based on “an assessment of how far the parties have met the steps we have set out. No one side will have veto on recognition through their actions or inactions.”
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Up to 300 children could be evacuated from Gaza and given NHS treatment in the UK. The plans are reportedly set to be announced within weeks.
He added: “Our focus is on the immediate situation on the ground, getting more aid in to end the suffering in Gaza and supporting a ceasefire and a long-term peace for Israelis and Palestinians based a two-state solution.”
Starmer, who recalled his cabinet for an emergency meeting last week before setting out the new position, is following the lead of French president Emmanuel Macron, who first pledged to move toward recognising Palestinian statehood in April.
Read more:
New US plan for Gaza starting to emerge
Hamas responds to disarmament reports
Canada has also backed recognition if conditions are met, including by the Palestinian Authority.
The prime minister had previously said he would recognise a state of Palestine as part of a contribution to a peace process.
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Efforts to bring Gazan children to the UK for urgent medical treatment are set to be accelerated under new government plans.
In his announcement last Tuesday, he said: “We need to see at least 500 trucks entering Gaza every day. But ultimately, the only way to bring this humanitarian crisis to an end is through a long-term settlement.
“So we are supporting the US, Egyptian and Qatari efforts to secure a vital ceasefire. That ceasefire must be sustainable and it must lead to a wider peace plan, which we are developing with our international partners.
“I’ve always said we will recognise a Palestinian state as a contribution to a proper peace process, at the moment of maximum impact for the two-state solution. With that solution now under threat, this is the moment to act.”
Adam Rose, a lawyer acting for British families of hostages in Gaza, has said: “Why would Hamas agree to a ceasefire if it knew that to do so would make British recognition of Palestine less likely?”
Former UK Chancellor and current Coinbase adviser George Osborne says the UK is falling behind in the cryptocurrency market, particularly when it comes to stablecoins.
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