Tokenization regulation · UAE
Tokenization regulation in the UAE: VARA, ADGM and DFSA
Tokenization is generally possible in the UAE, but which regulator applies depends on where the business is and what the token is. VARA regulates virtual assets in Dubai outside the DIFC; the DFSA regulates the DIFC; the FSRA regulates ADGM. Tokens with the features of securities are generally treated as securities in both financial free zones.
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Educational overview, not legal, tax or investment advice. Regulation changes, and the answer for any project depends on the asset, the structure, the investors and where they are. Consult qualified counsel in each jurisdiction before you issue, offer or market anything. Last reviewed 16 October 2026.
Is tokenization legal in the UAE?
Generally yes, within a licensed framework. The UAE has several regulators whose scope depends on geography and activity. A project first needs to know which zone it operates in, and then whether its token is a security, a virtual asset or something else under that zone’s rules.
Who regulates tokenized assets in the UAE?
| Where | Regulator | Framework |
|---|---|---|
| Dubai, mainland and free zones (except DIFC) | Virtual Assets Regulatory Authority (VARA) | Virtual Assets and Related Activities Regulations 2023 and VARA rulebooks |
| Dubai International Financial Centre (DIFC) | Dubai Financial Services Authority (DFSA) | DFSA Rulebook, including the Investment Tokens regime |
| Abu Dhabi Global Market (ADGM) | Financial Services Regulatory Authority (FSRA) | Digital securities and virtual asset frameworks |
| Federal | Capital Market Authority (whose site was formerly sca.gov.ae) | Virtual Assets Framework announced 13 April 2026 |
What does VARA regulate in Dubai?
VARA regulates the provision, use and exchange of virtual assets in and from Dubai, across the mainland and free zones except the DIFC. It licenses eight activities: advisory, broker-dealer, custody, exchange, lending and borrowing, management and investment, transfer and settlement, and VA Issuance Category 1. Other issuances (Category 2) need, among other things, an issuance approval form and a whitepaper. Custody must sit in a separate, separately licensed entity.
Are security tokens securities in the DIFC and ADGM?
Generally yes. In the DIFC, the DFSA’s Investment Tokens framework covers Security Tokens and Derivative Tokens. A Security Token is a token that is a Security, or that confers rights and obligations substantially similar to a Security or has a substantially similar purpose or effect. It applies to anyone marketing, issuing, trading or holding Investment Tokens in or from the DIFC, and to firms providing financial services in relation to them.
In ADGM, the FSRA treats any digital token with the characteristics of a security as a security, and runs a separate framework for spot virtual asset activities and for fiat-referenced tokens.
How does Libertum fit in?
Libertum is a software platform (T-Suite). It is not licensed, registered or authorised in the UAE and is not a VARA, DFSA or FSRA licensee there. What the software does:
- On-chain compliance rules. ERC-3643, CIP-113 and authorised XRPL tokens can enforce country allow/restrict lists, maximum balance, hold time and KYC claims, rejecting non-conforming transfers (Compliance).
- KYC and KYB run through Sumsub.
- Structuring module (Beta) with jurisdiction packs for El Salvador CNAD/LEAD, US SEC Reg D/Reg S, EU MiCA/MiFID II and Cayman Islands CIMA. Only the Cayman pack is counsel-reviewed and published; the others are drafts marked “Beta — pending counsel review”. Structuring is a software tool, not a Libertum legal or structuring service.
Libertum, S.A. de C.V. holds an El Salvador Digital Asset Service Provider (DASP) licence from the Comisión Nacional de Activos Digitales (CNAD), registry entry PSAD-0094, covering custody, exchange and transfer of USDT and USDC and receipt and transmission of client orders (LEAD Art. 19 (a), (d) and (f) numerals 1 and 2); RLUSD custody is approved by the CNAD under the same registration. It does not authorise any issuance, has effect in El Salvador only and confers no passporting or authorisation in the UAE. Issuers remain responsible, with their own counsel, for registration or exemption analysis in every jurisdiction. See Licences.
Related
- Tokenization regulation hub All jurisdictions compared
- El Salvador: LEAD and the CNAD Digital Assets Issuance Law, certifiers and DASPs
- European Union: MiCA and the DLT Pilot When MiCA applies and when MiFID II does
- United States: SEC rules Howey, Reg D, Reg S, Reg A+
- Singapore: MAS and the SFA Capital markets products and Project Guardian
- Hong Kong: SFC circulars Tokenised securities and authorised products
- Structuring Jurisdiction packs for issuers and their counsel
- Licences What Libertum's DASP licence does and does not cover
- Security token platform How compliance is enforced on-chain
UAE tokenization FAQ
Is tokenization legal in the UAE?
Generally yes, but it depends on where the business operates and how the token is classified. Dubai (outside the DIFC), the DIFC and ADGM each have their own regulator and rules, and federal rules may also be relevant.
Does VARA regulate the DIFC?
No. VARA’s remit covers Dubai’s mainland and free zones except the DIFC, which the DFSA regulates.
Is a tokenized share a security in ADGM?
Generally yes. The FSRA treats a digital token with the characteristics of a security as a security.
Does Libertum hold a UAE financial licence?
No. Libertum is a software platform and holds no VARA, DFSA, FSRA or federal financial-services licence. A group company, Al Xolame Assets Real Estate L.L.C, holds a Dubai commercial licence for buying and selling real estate, which is not a financial-services licence.
Primary sources
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- VARA — Virtual Assets Regulatory Authority (home) — VARA regulates the provision, use and exchange of virtual assets in and from Dubai, across mainland and free zones excluding the DIFC; Virtual Assets and Related Activities Regulations 2023.
- VARA — Licensed activities — Eight licensed VA activities including VA Issuance Category 1; Category 2 issuances need an Issuance Approval Form and whitepaper; custody must be a separately licensed entity.
- ADGM — Digital Assets — FSRA treats a digital token with the characteristics of a security as a security; separate framework for spot virtual asset activities; fiat-referenced token framework.
- DFSA Rulebook — 25 October 2021: DFSA introduces regulatory framework for Investment Tokens — DFSA as independent regulator of financial services in and from the DIFC; Investment Tokens (Security Tokens and Derivative Tokens) framework launched 25 October 2021 and who it applies to.
- DFSA Rulebook — Glossary: Security Token — Definition of Security Token: an Investment Token that is a Security, or confers rights and obligations substantially similar to a Security or has a substantially similar purpose or effect.
- UAE Capital Market Authority (sca.gov.ae redirects here) — sca.gov.ae now redirects to uaecma.gov.ae under the name Capital Market Authority; 13 April 2026 headline announcing a Virtual Assets Framework with five core modules and eight regulated activities.
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