Dubai: DFSA begins engagement with firms selected for Tokenisation Regulatory Sandbox
The Dubai Financial Services Authority (DFSA) on Monday said it has begun engagement with firms selected for its Tokenisation Regulatory Sandbox in the next phase to test financial products and services under a controlled environment.
The regulator of the Dubai International Financial Centre (DIFC) will work with the firms selected for the Innovation Testing Licence to co-develop bespoke testing plans. Sandbox participants will begin trials within a controlled environment in the coming weeks. The outcomes from this cohort will help inform future regulatory policy and potential refinements to the DFSA's evolving digital assets and broader innovation frameworks.
It received 96 expressions of interest from the UAE, the UK, the European Union, Canada, Singapore, and Hong Kong.
Applications included proposals to tokenise financial assets and instruments, such as bonds (including Islamic bonds, or sukuk), units in a fund (including money market funds and property funds), and the trading and safe custody of those assets – reflecting the broad potential of tokenisation across the financial ecosystem.
The Dubai International Financial Centre is a community of more than 900 regulated entities. It is home to 27 out of the 29 global systemically important banks, the top 5 Chinese banks, 260 banking and capital market companies, 410 wealth and asset management firms, 70 brokerage firms, 125 insurance and reinsurance-related companies and 75 authorised hedge fund businesses, positioning as a regional and global financial centre.
Charlotte Robins, managing director of policy and legal at DFSA, said this strong interest reflects a growing appetite for responsible innovation and DFSA's appeal to innovation as a regulator.
'Our role is to support innovation and its positive contribution to the financial markets in ways that maintain market integrity and protect the public interest within the DIFC. By working closely with local and global firms through the sandbox, we are encouraging responsible innovation and helping to ensure that new ideas are tested against regulatory expectations,' she said.
In 2021, the Dubai regulator introduced an Investment Token regime to regulate tokens used as investment instruments and implemented an enhanced Crypto Token regime in 2022 as a second-phase framework for classifying, recognising, and governing crypto tokens. This was followed in June 2024, when the DFSA further refined its approach with amendments – including streamlined token-recognition criteria and the first approvals of stablecoins – underscoring its commitment to adaptive, responsible innovation.
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