The Dubai Financial Services Authority (DFSA) has introduced a Tokenisation Regulatory Sandbox, inviting firms to test and develop tokenised financial services under a structured regulatory framework. This initiative is part of the DFSA’s Innovation Testing Licence (ITL) programme, designed to foster innovation in digital finance.

The DFSA aims to support the development of tokenised assets, including equities, bonds, sukuk, and investment fund units, by providing a controlled environment where firms can trial their financial solutions. This initiative aligns with Dubai’s vision of becoming a leading global hub for blockchain and digital finance.

“The DFSA’s Innovation Testing Licence programme has already helped fintechs and digital finance innovators in the DIFC,” the regulator stated. “By expanding its scope to tokenised investments, we reinforce Dubai’s role in shaping the future of financial technology.”‍

Who is Eligible?

The DFSA is seeking applications from firms engaged in issuing, trading, holding, or settling tokenised investments. Additionally, existing DFSA-regulated firms exploring tokenisation can apply. Eligible firms must have a clear understanding of legal and regulatory requirements and a business model suited for testing within the DIFC.

Importantly, crypto tokens and fiat-backed crypto tokens are excluded from this sandbox. The focus is on investment tokens that operate under distributed ledger technology (DLT) and align with traditional securities and derivatives.

Interested firms can submit an Expression of Interest (EOI) from March 17, 2025, to April 24, 2025. The DFSA will assess each application to determine its regulatory compatibility and market readiness. 

Those who meet the criteria will be invited to join the ITL Tokenisation Cohort, gaining access to regulatory support and structured testing opportunities.‍

Advancing Tokenised Finance

This initiative follows industry discussions at the Dubai FinTech Summit in 2024 and January 2025, where experts highlighted interoperability, scalability, regulatory clarity, and investor education as key challenges for tokenisation adoption. 

The DFSA aims to tackle these issues by offering a clear regulatory framework that fosters innovation while maintaining market integrity.