The first phase of the DFSA’s Digital Assets regime has commenced as the
Dubai Financial Services Authority (“DFSA”) has announced the launch of
its regulatory framework specifically for Investment Tokens (the
“Framework”)

As per the Framework, Investment Tokens are either Security or Derivative Tokens, which are
fundamentally:

• securities and derivatives in a cryptographically secured digital form representing rights and obligations that are issued, transferred and stored using Distributed Ledger Technology (“DLT”) or any other similar technology; or
• cryptographically secured digital representations of rights and obligations issued, transferred and stored using DLT or other similar technology and are either similar in nature or has a substantially similar purpose to a security or derivative.

The Framework is expected to apply to those interested in dealing with Investment Tokens in or
from the Dubai International Financial Centre (“DIFC”). This would include individuals interested
in marketing, issuing, trading or holding Investment Tokens and authorised firms interested in
conducting Investment Token related financial services (e.g. dealing in, advising on or arranging
transactions concerning Investment Tokens or managing discretionary portfolios or collective
investment funds investing in Investment Tokens).

The DFSA also revealed that they are currently working on proposals for other tokens such as
exchange tokens (i.e. cryptocurrencies), utility tokens and certain asset-backed tokens (e.g.
stablecoins) and is expected to be released later this year.

Disclaimer

This article is for informational purposes only and shall not be considered as legal advice or
opinion.