The Dubai Financial Services Authority (DFSA) has launched a tokenization sandbox and is accepting expressions of interest through to April 24. The DFSA is the regulator for the Dubai International Finance Centre (DIFC).
Applicants could be involved in the issuance, trading, holding, or settlement of tokenized assets. Cryptocurrencies are excluded along with stablecoins. The financial instruments that are tokenized should be similar to conventional securities including equities, bonds, sukuk and collective investment fund units.
As with most sandboxes, the aim is to relax certain regulatory requirements under the supervision of the regulator. Hence, it’s open to companies whether or not they are already DIFC-regulated. If accepted they will be granted a special Innovation Testing License (ITL) that will last from six to twelve months. It appears that the rule relaxations might be assessed on a case-by-case basis. At the end of the ITL period, the entity either will be awarded a full DIFC license or the ITL license will be terminated.
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