Detailed Explanation of Dubai RWA Regulations: Comprehensive Analysis of Compliance Pathways for Virtual Assets

Core Definition

VARA officially defines RWA as: a combination of one or more types for any virtual asset:

(a) rights in any financial instruments, plans or arrangements;

(b) physical and/or tangible assets; or

(c) intangible assets, rights, or interests, but excluding ---

i. Virtual assets themselves; or

ii. Projects that exist only in digital form.

VASP - Virtual Asset Service Provider

VARA - Dubai Virtual Assets Regulatory Authority

ARVA - Asset-backed Virtual Asset

1. Regulatory Framework and Core Institutions of Virtual Assets

1. Leading regulatory authority

Dubai Virtual Assets Regulatory Authority ( VARA ): Established in March 2022, responsible for regulating cryptocurrency-related laws in Dubai. Supervises the issuance, provision, and disclosure of virtual assets and NFTs, and collaborates with other federal agencies, including the Central Bank of the UAE, to develop ethical guidelines, general policies, and strategic plans.

Dubai Financial Services Authority ( DFSA ): is the regulatory authority of the Dubai International Financial Centre ( DIFC ). The DFSA's crypto token regime came into effect on November 1, 2022, providing comprehensive requirements aimed at protecting users and potential users of financial services related to crypto tokens.

2. Regulatory Framework

VARA Framework:

• Laws and Regulations: laws, cabinet resolutions, regulations, executive orders and resolutions, federal anti-money laundering/anti-terrorism financing laws
• Rulebook: Mandatory Rulebook, VA Activities, and Other Rulebooks
• Guidance: 2024 Virtual Asset Marketing and Related Activities Regulatory Guidelines
• Files: Administrative Order No. 01/2022, Administrative Order No. 02/2022

The DFSA framework includes regulations at multiple levels.

2. Specific Regulatory Requirements of VARA

1. Issuer pre-approval before issuance

1.1 Mandatory License Requirements

The issuance of ARVA belongs to Category 1 VA Issuance(, the highest regulatory category), and the issuer must obtain a VA issuance license from VARA.

1.2 Single Asset Approval

All VASPs licensed by VARA to issue Category 1 VA must obtain VARA's approval before issuing each ARVA. VARA may impose conditions on any approval for a VASP to issue ARVA at its discretion.

1.3 Reserve Asset Requirements

• Must hold sufficient reserve assets to cover the rights and value represented by ARVA.
• Reserve assets must be held by a licensed custodian and be independent of the VASP's own assets.
• Reserve assets cannot be re-pledged or encumbered.
• Ensure that reserve assets are legally separated from their property and any other virtual asset reserve.

2. Information Disclosure Requirements

2.1 White Paper Disclosure

A white paper must be published to the public before providing virtual assets, disclosing relevant content.

In addition to meeting the general disclosure requirements for virtual assets, ARVA shall also meet additional disclosure requirements. The specifics are as follows:

The general disclosure content mainly includes:

• Information about the issuer
• Information about virtual assets
• Information regarding the rights and obligations associated with virtual assets
• Information about underlying technology
• Information about authorized distributors
• Information on any initial offer of virtual assets to the public

The additional disclosure requirements for RWA mainly include:

• ARVA Value, Rights and Value Maintenance Policy
• Reference asset types and compositions, selection criteria, variability, ownership association, stable anchoring, legal compliance, and risks
• The existence, types and composition, selection criteria, variability and investment policy of reserve assets
• ARVA supply management, including creation and destruction, impact on reserves
• Holder redemption rights, including redemption details, compliance with rules, procedures and timelines
• Asset custody, including custodial arrangements, liquidity guarantees, etc.
• Risk management, including risk assessment, risk control measures, etc.

2.2 Continuous Disclosure Requirements

Shall disclose at least monthly and in a clear, accurate, and transparent manner on its website:

• The quantity and value of publicly circulating ARVA
• The value and composition of the reserve assets ( if applicable )

Confirm a statement, confirming whether ARVA has sufficient reserve assets for adequate support at the time of disclosure.

3. Capital Requirements

VASP authorized to issue ARVA shall always maintain its paid-in capital at least equal to the higher of the following two:

• AED 1,500,000( is approximately CNY 2,925,000)
• 2% of the average market value of reserve assets over the past 24 months

4. Requirements for Legitimacy of Ownership Transfer

If ARVA represents direct ownership of RWA, the issuer must ensure:

• Ownership is legally established, and the RWA ownership is synchronously transferred during the token transfer.
• Comply with the legal settlement requirements for RWA transactions

5. Redemption mechanism requirements

• Holders must be allowed to redeem in AED or other forms of equivalent value disclosed in the white paper.
• Redemption requests must be processed within a reasonable timeframe and without any fees.

6. Audit and Reporting

• VASPs licensed to issue VARA should appoint an independent third-party auditor and promptly notify VARA of the auditor's full name and contact information after the appointment.
• The senior management of VASP holding an ARVA license should submit a proof of accuracy for each independent audit to VARA as soon as possible after completion.
• Conduct independent audits of the circulating ARVA and reserve assets every 6 months.

7. Multiple Rules Compliance

The issuer must also comply with the relevant requirements of the four core rule manuals:

• Company Rules Manual
• Compliance and Risk Management Rule Handbook
• Technical and Information Rules Manual
• Market Conduct Rules Handbook

3. DFSA Regulatory Updates

The DFSA officially released the "Tokenized Regulatory Sandbox Guidelines" on March 17, 2025, marking Dubai's incorporation of RWA tokenization into the mainstream financial regulatory system, providing a low-threshold, high-clarity, full-chain compliance path for global projects.

The participation process of the sandbox program is divided into two stages and four core steps, as follows:

Phase One: Submit Letter of Intent

• Eligibility: Enterprises must engage in tokenization business ( for issuing/trading/holding/settling RWA, stocks, bonds, etc. ), excluding cryptocurrencies and stablecoins; existing DFSA licensed institutions can expand their business.
• Application materials and time: Submit the letter of intent at zero cost. The window period is from 2025.3.17 to 2025.4.24(. Late submissions will need to wait for the next round ).
• DFSA Assessment: Preliminary review of business compliance ( to determine whether it falls under the DIFC licensing scope ). If approved, schedule a meeting to discuss details of the business model.

Phase Two: Innovative Testing Permit ( ITL Tokenisation Cohort )

To enter the ITL Tokenisation queue, a DFSA license is required. Interested companies must apply and complete the authorization process to join the program.

4. Dubai Real Estate RWA Case

Multiple real estate RWA projects have been established in Dubai, providing practical experience for the development of this field.