Dubai clarifies rules for asset-backed tokens and stablecoins

Dubai’s financial regulators published clarified guidance this month detailing how tokens tied to physical assets and fiat‑pegged stablecoins must be issued, backed and managed. The document sets rules on licensing, disclosure, reserve holding and custody to protect investors and enable secondary trading.

The guidance applies to tokens representing ownership or rights in real estate, commodities, collectibles and similar physical assets, and to stablecoins that maintain a peg to fiat currency. The guidance requires minimum standards for how underlying assets and reserves are held and verified, independent attestations of reserve holdings, and clear redemption and pricing mechanisms for stablecoins.

Issuers, operators and firms that market these tokens must hold the appropriate licences and meet ongoing reporting and compliance obligations. The rules require use of regulated custodians or escrow arrangements for underlying assets and reserve funds and mandate separation of client assets from corporate funds. Regular audits or third‑party attestations are required to confirm backing and to ensure stablecoin supply matches reserves when a fiat peg is promised.

Offering documents or whitepapers must disclose the token’s legal structure, the nature and location of underlying assets or reserves, redemption rights, fees and risks. Exchanges, brokerage firms and wallet providers that list or facilitate trading in asset‑linked tokens and stablecoins must be registered and comply with anti‑money‑laundering and sanctions screening requirements.

The guidance sets operational requirements for smart contract security, including security audits and incident reporting, and requires contingency planning, governance frameworks and consumer complaint procedures. Enforcement measures for breaches include fines and licence suspensions.

For cross‑border activity, foreign issuers serving Dubai clients must appoint a local agent or obtain regulator approval. Marketing to retail investors is subject to enhanced disclosure and suitability checks. The guidance places extra scrutiny or restrictions on high‑risk structures such as tokens that promise guaranteed returns or use complex leverage.

Additional provisions specify that stablecoin redemption processes must be predictable and transparent and that issuers maintain sufficient liquidity to meet reasonable redemption demands. For real‑world asset tokenization, token rights must be legally enforceable against the underlying asset and ownership should be registered where applicable.

The guidance follows earlier rulemaking in Dubai that set licensing baselines and operational standards for virtual asset activities and is consistent with international efforts to increase oversight of stablecoins and tokenized assets.