DFSA Advances Tokenization Agenda with Next Phase of Regulatory Sandbox
The Dubai Financial Services Authority (DFSA), the independent regulator of the Dubai International Financial Centre (DIFC), has announced the launch of the next phase of its Tokenisation Regulatory Sandbox.
This new stage sees the onboarding of selected firms into its Innovation Testing Licence (ITL) programme, a controlled environment where innovative financial products and services can be tested under regulatory supervision.
This new development highlights the DFSA’s continued leadership in fostering responsible innovation in the FinTech and digital asset sectors. Since launching its ITL programme in 2017, the DFSA has remained focused on building a future-ready financial ecosystem that accommodates both traditional institutions and next-generation fintech players.
Building on a Strong Foundation
The DFSA’s progressive approach began with the introduction of its Investment Token regime in 2021 — the first of its kind — followed by a comprehensive Crypto Token framework in 2022. Most recently, in June 2024, the DFSA introduced updates to streamline token recognition and approve its first stablecoins, reinforcing its commitment to responsible innovation and regulatory clarity.
The Tokenisation Regulatory Sandbox, unveiled in March 2025, attracted strong international interest with 96 expressions of interest from across the UAE, UK, EU, Canada, Singapore, and Hong Kong. Applications proposed a wide range of tokenisation models, including digital representations of bonds (including sukuk), fund units, and tokenised trading and custody services, showcasing the global appetite for tokenising real-world financial assets.
Supporting Innovation Through Collaboration
At the DFSA’s recent Policy & Legal Roundtable, Charlotte Robins, Managing Director of Policy & Legal, said, “The global interest in our Tokenisation Regulatory Sandbox signals the importance of, and growing appetite for, responsible innovation, and recognises the appeal of DFSA’s regulatory approach. By working closely with local and global firms through the sandbox, we are encouraging innovation while safeguarding market integrity and the public interest.”
Applicants were assessed based on the maturity of their business models, clarity of use cases, and readiness to test within a sandbox environment.
While several firms have been invited to begin live testing under the ITL programme, others demonstrated sufficient operational maturity to qualify for full authorisation under existing DFSA rules.
Next Steps: Live Trials to Shape Future Regulation
In the coming weeks, firms in the ITL programme will begin trials in a controlled environment, co-developing tailored testing plans with DFSA supervisors. Insights from this cohort will inform future policy and may lead to refinements in the DFSA’s digital asset and broader innovation frameworks.
The DFSA’s proactive regulatory strategy aligns with the DIFC’s ambition to be a global centre for digital finance and supports Dubai’s Economic Agenda D33, which aims to position the emirate among the world’s top four global financial hubs by 2033.
For more information on the Innovation Testing Licence and how it supports responsible innovation, visit the DFSA website.
