DFSA's tokenisation regulatory sandbox attracts investor interest
The Dubai Financial Services Authority (DFSA), the independent regulator of the Dubai International Financial Centre (DIFC), has announced that 96 innovative firms have expressed interest in the DFSA's inaugural Tokenisation Regulatory Sandbox. The launch of the sandbox marks a major step forward in the DFSA's strategy to support responsible financial innovation within the DIFC and reflects its growing focus on tokenisation as a transformative force in financial services.
The Tokenisation Regulatory Sandbox forms part of the DFSA's Innovation Testing Licence programme and supports the regulator's broader commitment to fostering innovation while maintaining market integrity and protecting investors. Expressions of interest came from a diverse range of sectors that are exploring the tokenisation of financial assets and instruments, including those associated with the tokenisation of shares, bonds (including Islamic bonds (sukuk)), units in a fund, and the trading and safe custody of those assets – reflecting the broad potential of tokenisation across the financial ecosystem.
The initiative attracted strong interest from both established financial institutions wishing to explore tokenisation use cases and innovative start-ups looking to scale breakthrough digital asset solutions in a regulated environment. This strong engagement underscores DIFC's growing appeal as a global hub for digital finance and innovation.
Justin Baldacchino, Managing Director, Supervision, DFSA, said: 'We are excited to see such strong interest in the DFSA's Tokenisation Regulatory Sandbox and to talk about it at the Dubai FinTech Summit. This momentum supports the DFSA's strategic commitment – and aligns with the Dubai Economic Agenda D33 goal – to position Dubai among the world's top four global financial hubs by 2033. The sandbox marks a new chapter in our engagement with innovative financial technologies, enabling firms to safely test tokenised solutions in a transparent, measured, and responsible manner, within a well-regulated environment, without being subject to the full suite of regulatory requirements that would otherwise apply.'
The DFSA's themed sandbox approach enables targeted supervision, constructive regulatory dialogue, and the development of tailored policy responses to emerging financial technologies while fostering responsible innovation in the market. It also supports DIFC, Dubai, and the United Arab Emirates' broader ambition to become a global hub for digital assets, fintech, and next-generation financial services and market infrastructure.
Following the Expressions of Interest stage, selected firms will be invited to apply for an Innovation Testing Licence and enter a live testing phase under DFSA oversight, where they can refine their offerings while addressing critical areas such as investor protection, transparency, and financial stability. Upon successful completion of the programme, firms may apply to transition to a full, unrestricted licence, or withdraw their Innovation Testing Licence. For more information on the Innovation Testing Licence, access the explainer guide here.
The DFSA's Tokenisation Regulatory Sandbox underscores the DFSA's commitment to enable innovation in a way that is responsible, informed, and aligned with global regulatory best practice.
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