Tokenising a Real-World Asset Does Not Create a New Regime

ADGM's digital securities guidance sets out the mechanism. If a token being offered shows the economic and legal features of a Security, the FSRA will deem it a Security under section 58(2)(b) of the Financial Services and Markets Regulations (FSMR). Section 58(2) is a power to deem, by written notice, an investment that is not otherwise a Security to be one. The FSRA decides case by case, using the issuer's own documents: the Approved Prospectus, or the Exempt Offer document where no prospectus is needed. It may also ask for constitutional documents and legal opinions. From that point the ordinary securities rules apply. A prospectus offer needs an application to the FSRA at least 20 days before the offer starts, and the FSRA generally expects the issuer of a digital security to be incorporated in ADGM. A distributed ledger register changes none of this.

The same guidance sorts digital assets into five categories. Digital Securities are deemed Securities. Virtual Assets and Utility Tokens are treated as commodities, so they are not Specified Investments. Derivatives and Collective Investment Funds of virtual assets, digital securities and utility tokens are regulated as Specified Investments. Fiat Tokens, meaning stablecoins fully backed by fiat currency, are treated as a digital form of fiat currency, and fall under Providing Money Services when used as a payment instrument for money transmission. An offer of a Utility Token falls outside the FSRA's remit and is not permitted under the Markets Rules. Run this sorting before the zone decision, because a licence inside a designated economic zone does not by itself give permission for a regulated financial activity.

There is also a hard limit. ADGM's guidance says capital formation activities are not provided for under the Virtual Asset Framework and are not envisaged under the Markets Rules, so a virtual-asset permission is not a way to raise money in a token. Securities-like tokens go down the securities route or they do not go. Where the issuer sits, such as the onshore route licensed by DED, does not change the classification; the features of the claim do.

The Capital Market Authority's published virtual-asset guidelines place digital securities and DLT-securities outside the virtual-asset framework: they are considered securities subject to the legislation regulating traditional securities, plus whatever technology requirements the regulator imposes. Digital commodity derivative contracts are treated the same way. A UAE trade licence is a commercial licence, so it is not the permission for these activities: operating a trading system for tokenised securities needs a licence from the Capital Market Authority under its Alternative Trading System module.

The framework the regulator issued on 13 April 2026 then does something specific. Its Alternative Trading System module is not virtual-asset-only: it extends to conventional multilateral trading facilities for securities and to multilateral trading facilities dedicated to tokenised securities. Its Chapter Thirteen adds rules for a system dedicated to tokenised securities and tokenised commodity contracts. The ledger must be permissioned. The operator must verify disclosure on what is traded, including through a prospectus and continuous disclosure rules. A third-party wallet custodian must be licensed by the Capital Market Authority or by an equivalent regulator it accepts. An independent external auditor must report on technology every year. The stated organising principle for the whole framework is same activity, same risk, same regulatory outcome, which is the shortest available statement of why tokenisation is not its own regime. The applicant must already be a legal entity, so choosing where the licence should sit comes before the application.

One caution, because it limits how much weight any of this can bear. The Alternative Trading System module is published and we read it. We could not retrieve the operative resolution behind the April 2026 framework, and the older guidelines describing a six-licence regime remain on the same site. We found no published transition arrangements. A separate draft regulation on security tokens and commodity tokens was consulted on in January 2025, and we found no published issuance notice for it. Anyone who tells you exactly which track a tokenised instrument sits under, outside that module, is reading something we have not found.

Deciding that an instrument is a security only starts the structuring conversation. The next question is what the entity actually is, and the published regimes contemplate several answers that are not interchangeable.

Tokenised vehicles are not hypothetical in the UAE. ADGM announced the Realize T-BILLS Fund as the first tokenised T-bill fund in ADGM, and its own framing of tokenisation is forward-looking: at Abu Dhabi Finance Week in December 2025 the FSRA presented tokenisation, decentralised finance and AI-driven market participation as the next wave the framework must respond to, rather than as an existing dedicated regime.

That is the right way to read every live example: as an existence proof that the route works, and not as a template, because what is published is the outcome, and what decided the outcome (the drafting of the claim, the choice of vehicle, the sequencing of approvals) is not published by anyone.

Dubai's regulator, VARA, has issued two public notices on this subject. In April 2025, jointly with the Dubai Land Department, it addressed entities falsely claiming or otherwise purporting to participate in the pilot phase of the DLD Real Estate Tokenisation Project, stating that the project was officially launched on 19 March 2025 as a limited pilot phase involving select participants approved by both bodies. In February 2026 it confirmed that the initial pilot phase was complete and that the project had entered a controlled testing phase, Phase 2, and warned about entities referring to the initiative in marketing without approval. The Dubai Land Department announced that Phase 2 enables resale in the secondary market from 20 February, covering approximately 7.8 million real estate tokens.

Under Dubai Law No. (4) of 2022 and Cabinet Resolution No. 111/2022, no person may carry out virtual asset activities in or from Dubai without a VARA licence or approval. Anyone offering, marketing or facilitating tokenised real estate in or from Dubai needs the appropriate licence or approval from VARA and any other relevant authority. VARA says only formal communications issued directly by VARA should be relied on to confirm participation in the initiative, and advises checking a firm on its Public Register. Imprecise public claims have already drawn regulatory attention here, which is a reason to take advice rather than a route to copy.

None of the above is portable. In Dubai, VARA is the sole authority regulating virtual assets across free zones and mainland, except within the Dubai International Financial Centre (DIFC). DIFC is the Dubai Financial Services Authority's, under a separate regime that we have not read for this analysis. ADGM is the FSRA's, geographically bounded. Every other emirate, including its commercial free zones, is the federal regulator's, and financial free zones are excluded from the federal virtual-asset regime entirely.

Each regime uses its own vocabulary. ADGM grants a Financial Services Permission to a Multilateral Trading Facility and recognises investment exchanges. The Capital Market Authority licenses an Alternative Trading System, which can be a multilateral or an organised trading facility. The token classification has to be run separately in each regime. Choosing the jurisdiction before the regime is the wrong order, and it is expensive to unwind because the entity is fixed at the first approval.

Which track a tokenised instrument sits under (conventional securities law, the tokenised-securities venue module, a fund regime, or a virtual-asset permission) is decided by how the claim is drafted, before issue. Rewriting the claim after issuance is a different transaction entirely, so the track is effectively fixed at design stage.

That judgement is not on any regulator's website. It comes from reading the specific instrument against the regimes that could take it: ADGM's features-and-characteristics test, the Capital Market Authority's securities legislation and Alternative Trading System module, and VARA for virtual-asset activity in Dubai. The entity that ought to exist is decided before any regulator is approached, and some designs will need to change to be licensable at all.

Classification is made on documents. In ADGM the FSRA uses the prospectus or the Exempt Offer document to decide whether to deem the token a Security, and may ask for constitutional documents and legal opinions. The terms of the claim are therefore fixed at drafting. No regulator publishes the answer for a specific instrument.

So bring us the claim before the chain: what the holder is actually owed, by whom, and on what terms. We will read it against the regimes that could take it, tell you which vehicle it needs and in what order the approvals have to be sought, and be straight with you about which parts of the design would have to change to be licensable. This is structuring commentary rather than legal advice, and it is not an opinion on how any regulator will read a particular set of facts.