Senior Official Says VARA Focuses on Consumer Protection in Dubai's Tokenization Process
VARA closely monitors the actual tokenization in the city and ensures consumer protection.
Parikshit Mishra | Edited by Nikhilesh De Updated Mar 27, 2025 11:45 AM UTC Published Mar 27, 2025 9:19 AM UTC
Key points:
- According to a senior official, VARA's achievements can be attributed to an effective strategy for communicating with crypto companies.
- Dubai has become a preferred destination for foreign cryptocurrency companies due to its transparent regulations and favorable geographical location.
- VARA closely monitors the actual tokenization in the city and ensures consumer protection.
Regulation of cryptocurrencies has come a long way. It is no longer a game of passing between different government agencies: digital assets now have specialized controllers in different regions.
One of the leaders in this area is Dubai’s crypto regulator, the Virtual Assets Regulatory Authority (VARA). As a senior official noted, VARA stands out for its ability to effectively communicate guidelines and regulations to crypto firms.
“Set it and forget it doesn’t work for cryptocurrency, it’s all about feedback and open channels,” said Sean McHugh, senior director of market assurance at VARA. “Because we’re focused solely on crypto, it gives us the opportunity to understand the technology in depth, and our rules are tailored to the modern world.”
Dubai has become a favorite destination for cryptocurrencies, becoming one of the most attractive options for foreign crypto companies looking to set up offices and expand into the region and beyond.
“Dubai is seen as a great entry point. We’re seeing a lot of [crypto] companies coming here from Europe and elsewhere, and the opposite is also true: we’re seeing companies coming here from other parts of Asia. It’s a strategic move, and regulatory clarity is important in that,” McHugh added.
Tokenization and more
Real-world tokenization, or RWA, is gaining popularity in Dubai, and for good reason. The region’s real estate agency, Dubai Land Department (DLD), recently launched a pilot project to register and transfer title deeds on the blockchain. This tokenization initiative is supported by VARA and the Dubai Future Foundation (DFF).
Integrating real estate into the blockchain could significantly boost the city’s real estate market. DLD expects tokenized real estate to grow to AED 60 billion (US$16 billion) by 2033, representing 7% of Dubai’s total real estate transactions.
McHugh, speaking to CoinDesk at VARA's office, believes real estate is just the beginning.
“It’s very popular not only in Dubai but also outside of Dubai. In Dubai, there is an opportunity to resolve issues faster,” he noted, adding that there are also many projects to tokenize precious metals.
According to him, VARA, taking a flexible approach to regulation, closely monitors developments in this area.
“Whether it's real estate, precious metals or other assets, a lot of my focus here is on protecting clients. So, especially when it comes to splits, it brings in a lot of new capital and retail investors that need to be protected,” he said.
“We ask a lot of questions when it comes to RWA projects
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