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On March 17, 2025, the Dubai Financial Services Authority (DFSA) launched a Tokenization Regulatory Sandbox within the Dubai International Financial Centre (DIFC), providing crypto firms a controlled environment to develop tokenized investment products. The program offers crypto firms a secure space to test tokenized investment products while operating under regulatory supervision.
Participating companies will have the opportunity to issue, trade, hold, and settle tokenized assets, including equities, bonds, sukuk, and units of collective investment funds, within a supervised environment.
The DFSA began accepting applications on March 17 for businesses seeking to join its Tokenization Regulatory Sandbox program.
Selected applicants will move forward to the Innovation Testing License Tokenization Cohort. Here, they can develop and test tokenization products and services under the oversight of DFSA regulators.
During this phase, crypto firms specializing in tokenization must formally declare their interest and demonstrate both regulatory understanding and technical expertise to qualify.
The sandbox begins with an Expression of Interest period, running from March 17 to April 24, 2025.
In January, Qatar’s Central Bank launched both the Regulatory Sandbox and Express Sandbox, enabling fintech companies to explore blockchain-based financial services. Similarly, Singapore’s Monetary Authority (MAS) rolled out initiatives like Project Orchid and Project Guardian in August 2024, resulting in real-world applications such as DBS Bank’s blockchain treasury tokens and blockchain-powered government grants.
Dubai’s strategy mirrors the efforts of other financial regulators.
The European Blockchain Sandbox, launched in February, selected several projects across Germany, Switzerland, and France to refine regional regulatory strategies.
Europe also made strides. The Digital Securities Sandbox (DSS), backed by the Bank of England and the Financial Conduct Authority (FCA), provides a live regulatory setting for firms testing digital securities and distributed ledger technology (DLT).
Earlier this month, Ripple secured a license from the DFSA, marking its first full authorization in the Middle East. The license allows Ripple to provide regulated crypto services within the DIFC, expanding its reach in the region.
Dubai’s regulatory openness is also evident in its recent approvals of key crypto firms.
This authorization enables financial institutions and fintech firms to integrate USDC and EURC for payments, treasury services, and broader financial applications, supporting Dubai’s digital finance growth. In January, blockchain firm Mantra secured a $1 billion agreement to tokenize properties belonging to the Damac Group, one of the UAE’s largest conglomerates.
In February, Circle also received DFSA approval to operate its USDC and EURC tokens within the DIFC.