Analysis of the Dubai Virtual Assets Regulatory Framework: Comprehensive Analysis of RWA Compliance Pathways

1. Regulatory Framework and Core Institutions of Virtual Assets

1. Leading regulatory authority

The Dubai Virtual Assets Regulatory Authority (VARA) and the Dubai Financial Services Authority (DFSA) are the two main regulatory bodies. VARA was established in March 2022 and is responsible for regulating cryptocurrency laws in Dubai, working with other federal agencies to develop relevant policies. The DFSA, as the regulatory authority for the Dubai International Financial Centre, had its crypto token regime come into effect in November 2022, aiming to protect users of financial services related to crypto tokens.

These two institutions manage different types of licenses and business scopes, jointly building the regulatory framework for virtual assets in Dubai.

2. Regulatory Framework

The regulatory framework of VARA includes multiple levels such as laws and regulations, rule manuals, guidelines, and archives. The DFSA has established its own regulatory system, covering regulations in various areas.

2. Specific Regulatory Requirements of VARA

1. Issuer pre-approval before issuance

ARVA issuances belong to the highest regulatory category, and issuers must obtain a VA issuance license from VARA. Each ARVA issuance must be approved by VARA in advance. Regarding reserve assets, it is required to hold sufficient assets, which must be custodially held by a licensed custodian and kept separate from the VASP's own assets.

2. Information Disclosure Requirements

A white paper must be published before issuance, and in addition to meeting general disclosure requirements, it must also meet the additional disclosure requirements of ARVA. In terms of ongoing disclosure, the circulating amount and value of ARVA, as well as the status of reserve assets, must be published on the website at least monthly.

3. Capital Requirements

VASP authorized to issue ARVA must maintain a minimum paid-in capital of 2.5 million dirhams or the higher of 2% of the average market value of reserve assets.

4. Legality requirements for ownership transfer

If ARVA represents direct ownership of RWA, the issuer must ensure that the ownership is legally established, and that the ownership of RWA is transferred simultaneously with the token transfer, in compliance with relevant legal requirements.

5. Redemption mechanism requirements

Holders must be allowed to redeem at par value in Dirhams or other disclosed forms, and redemption requests must be processed free of charge within a reasonable time frame.

6. Audit and Reporting

The VASP issuing ARVA must designate an independent third-party auditor to conduct audits of the circulating ARVA and reserve assets every six months and report to VARA in a timely manner.

7. Multiple Rules Compliance

The issuer must also comply with the requirements of multiple rule manuals regarding corporate governance, Compliance and risk management, technology and information, as well as market conduct.

3. DFSA Regulatory Dynamics

In March 2025, the DFSA released the "Tokenized Regulatory Sandbox Guidelines," incorporating RWA tokenization into the mainstream financial regulatory framework. The sandbox program participation process is divided into two phases: submission of a letter of intent and innovation testing license. This provides a low-threshold, high-clarity, and full-chain compliance pathway for global projects.

Four, Dubai Real Estate RWA Case

Dubai has begun exploring the tokenization of real estate assets, which provides a practical case for the regulation of RWA in real-world applications.