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Charlotte Robins, the Managing Director of Policy and Legal at the Dubai Financial Services Authority (DFSA), discusses the approximately 100 expressions of interest received from six different jurisdictions within the Tokenisation Regulatory Sandbox. This indicates a rising global interest in responsible financial innovation.
In this conversation, Robins highlights the standout models, how this initiative is in sync with Dubai’s D33 economic strategy, and the DFSA’s approach to integrating innovation with effective regulation, aiming to establish the Dubai International Financial Centre (DIFC) as one of the top four financial hubs worldwide.
The Tokenisation Regulatory Sandbox received 96 expressions of interest from six jurisdictions. What does this signify about the future of tokenisation and the DFSA’s regulatory stance?
The international interest in our Tokenisation Regulatory Sandbox underscores both the demand for responsible innovation and the appeal of the DFSA’s supportive regulatory stance. Our mandate involves fostering innovation that enhances the financial market while ensuring market integrity and safeguarding public interests within the DIFC. By collaborating closely with local and international companies through the sandbox, we promote responsible innovation and ensure that novel concepts are rigorously evaluated against regulatory requirements.
What were some noteworthy tokenisation models proposed by applicants? Did any sectors, such as sukuk or property funds, particularly stand out?
The expression of interest (EOI) phase offered the DFSA crucial insights into the variety and sophistication of tokenisation models being explored globally. Nearly 100 submissions were received, including ideas focused on the tokenisation of financial assets like bonds (including Islamic bonds, or sukuk), fund units (including money market and property funds), along with trading and custody arrangements, highlighting the extensive applicability of tokenisation across the financial landscape.
This initiative has garnered significant interest from both established financial institutions exploring potential tokenisation applications and innovative start-ups aiming to enhance digital asset solutions within a regulated context. We received applications from both the UAE and various other regions, including the UK, EU, Canada, Singapore, and Hong Kong.
Can you explain the evaluation process? What criteria were used to decide whether a firm was selected for the Innovation Testing Licence program or granted full authorization?
The EOI phase occurred between March and April this year. Following this, we performed an initial assessment of the submissions to determine if the proposed tokenisation activities were within the regulatory scope for financial services in the DIFC.
After these evaluations, the DFSA engaged with a majority of the applicants, identifying those with clear business models, readiness to operate in the DIFC, and familiarity with the DFSA’s regulations, enabling them to proceed to the next stage.
In June, several firms were invited to prepare their applications, either for the Innovation Testing Licence program (ITL), our regulatory sandbox, or, if their business models were sufficiently developed and tested in other markets, for full licensing.
The DFSA evaluates applicants’ readiness for the Tokenisation Sandbox based on specific ITL eligibility criteria, including:
• Adequate resources (both financial and operational) for implementation
• Preparedness to test innovative products and services
• Commitment to offering products and services in the DIFC and broader UAE during and post-sandbox testing
How does the DFSA balance promoting financial innovation while ensuring market integrity, especially with emerging technologies like tokenisation?
At the DFSA, we understand that well-founded, proportional, and balanced regulatory frameworks are essential in fostering a favorable environment for innovative firms. Thus, we create and adapt regulatory regimes thoughtfully, avoiding unnecessary burdens that could inhibit innovation. Our commitment includes public consultation on any rulebook modifications to ensure our approach to regulation:
- Is proportionate and risk-based enough to support beneficial innovation while being robust enough to prevent a decline in trust.
- Evolves in response to market developments, adhering to the principle of “same activity, same risk, same regulatory outcome.”
- Focuses on producing regulatory outcomes that reflect local market needs instead of a uniform regulatory approach.
Additionally, we engage proactively with market participants, advisors, and industry bodies to identify ways to enhance our regulatory framework through webinars, roundtables, and consultations. In such a rapidly changing market environment, collaboration and industry engagement are paramount.
How will the experiences from this sandbox phase shape future regulatory progress concerning digital assets, from investment tokens to stablecoin approvals?
The insights gained from our sandbox, including the Innovation Testing License, will allow us to monitor how innovative technologies perform in a regulated environment. This knowledge will help us pinpoint potential risks, advantages, and regulatory gaps, facilitating more well-informed, flexible policymaking that champions innovation while safeguarding consumers.
In May 2025, we released a guide detailing the application process for the ITL sandbox, empowering innovators with the essential information to engage with the DFSA, fostering transformative financial services in the DIFC.
We are witnessing an increase in demand for innovation and cryptocurrency, with firms approaching us and collaborating with global regulatory bodies through platforms like the Global Financial Innovation Network (GFIN) to share knowledge and best practices. As regulators, it’s crucial to strike a balance between supporting growth and innovation while consistently protecting stakeholders, investors, and the market.
In terms of trends within the innovation sector, tokenisation is currently at the forefront.
How does the Tokenisation Regulatory Sandbox align with Dubai’s D33 economic agenda? What role do you see tokenisation playing in establishing DIFC as one of the world’s top four financial centers?
The DFSA’s regulatory ITL Sandbox aligns with Dubai’s D33 economic vision by facilitating secure experimentation with tokenised and innovative financial products, positioning the DIFC as a leader in FinTech innovation. As Dubai strives to emerge as a premier global financial center, our sandbox acts as a practical means to translate policy into tangible outcomes, attracting global participants while crafting forward-thinking regulation. By incorporating tokenisation within a transparent framework, we not only encourage innovation but also establish global benchmarks, establishing Dubai as a premier jurisdiction for digital finance.
The DFSA has been expanding its regulatory sandbox to include non-traditional financial institutions and tech startups. What initiatives are you implementing to ensure diverse participation, and how is this influencing your regulatory tools?
To enhance the participation of non-traditional financial institutions (NBFIs) and tech startups in the ITL program, the DFSA employs a blend of outreach, design flexibility, incentives, and support measures. Key strategies include:
• Establishing themed sandboxes, such as the Tokenisation Sandbox introduced earlier this year;
• Allowing fintech companies to join the sandbox with tailored regulatory requirements, including waivers and modifications for the testing period;
• Creating a streamlined and transparent application process with set timelines and expectations;
• Offering regulatory guidance through close oversight to support participants’ success in the program.
Initiatives like the DFSA’s Tokenisation Regulatory Sandbox highlight our dedication to promoting innovation responsibly, in line with global regulatory best practices, supporting the DIFC’s emergence as a premier digital finance hub, and aligning with Dubai’s Economic Agenda D33, which aims to establish Dubai as one of the top four financial centers globally by 2033.
As previously mentioned, our sandbox will enable us to observe how innovative technologies function in a controlled setting, allowing us to identify potential risks, benefits, and regulatory gaps—resulting in more informed and adaptive rulemaking.