The Dubai FSA launches Tokenization Regulatory Sandbox for crypto firms

Dubai financial regulators are opening registrations for crypto firms to participate in the nation’s first Tokenization Regulatory Sandbox, starting from March 17 to April 24.

According to the site’s official announcement , the sandbox is an initiative launched by the DFSA to facilitate crypto firms who wish to explore tokenized investment products and services within a controlled environment. The program will take place within the Dubai International Financial Centre.

The sandbox serves as a regulatory pathway for crypto firms, enabling them to take their products and services from the experimentation stage to receiving full authorization from the DFSA. Through this program, financial authorities will be expanding the scope of its Innovation Testing License to include tokenized investments.

The sandbox consists of two phases. First is the expression of interest, in which firms can formally communicate their intention to develop tokenized products and services within the DIFC. The second phase will group them into the Innovation Testing License tokenization cohort, where they can test tokenization products and services through the program.

Crypto firms that are interested in participating in the sandbox program can submit an expression of interest to the DFSA before April 24, 2025.

The Tokenization Regulatory Sandbox is open to firms that seek to offer customers tokenization financial services, which include firms issuing, trading, or holding tokenized investment products, DFSA-licensed firms looking to dive into tokenization, and firms with a strong understanding of the legal and regulatory requirements needed.

In order to take part in the sandbox, crypto firms will have to go through an assessment process. Companies that already have established business models and regulatory understanding will be invited to take part in the DFSA’s Tokenization Regulatory Sandbox. They will then receive specific regulatory support and structured testing opportunities.

Most recently, Ripple secured a DFSA license on March 13, allowing the crypto firm to provide regulated crypto payment services in the Dubai International Financial Centre. Ripple has become the first blockchain-powered payments company licensed by the DFSA.

Moreover, Ripple Labs has also been known to venture into real-world asset tokenization. In late January, Ripple allocated $10 million of its funds into tokenized U.S. Treasuries that were issued on the layer 1 blockchain XRP ledger.