The Middle East is emerging as a global leader in tokenized finance, driven by purpose-built regulation and deep pools of capital. The UAE and Saudi Arabia made tokenization a priority with frameworks designed from the start, while other regions still adapt old rules.
“The UAE and Saudi Arabia view digital assets as part of their national economic strategies, not as an isolated experiment, and they have built purpose-built regulatory frameworks, such as VARA in Dubai and new federal token rules, that don’t rely on retrofitting legacy securities laws,” says Oscar Asly, Group CEO of M4Markets, a forex and CFD broker.
Ross Shemeliak notes that unlike the U.S. and EU, where regulation is fragmented and reactive, the Middle East is moving fast with clear, top-down frameworks.
“Jurisdictions like ADGM in Abu Dhabi, DIFC in Dubai, and QFC in Qatar are introducing licensing regimes tailored specifically for tokenized securities and digital asset firms,” he says.
Regulators are also willing to adapt.
“VARA has been in place for just over three years,” says Robert Farquhar, CCO at tokenization platform Ctrl Alt. He explains that Dubai regulators are open to collaboration. They acknowledge the framework is still evolving, but rather than sticking to old rules, they’re willing to work closely with private markets “to make things happen.”
Farquhar says an early challenge was that tokenizing an asset didn’t make it legally valid. A court would still rely on the title deed, not an NFT.
To fix this, regulators created tokens that serve as legal title deeds. Dubai’s Land Department is piloting this through its Real Estate Tokenization Project, the first in the Middle East to digitize titles on the blockchain.
Saudi Arabia is taking a similar path. Its Real Estate Registry has launched a blockchain for property tokenization and digital ownership transfer — making it the first country to deploy infrastructure for registration, fractionalization, and marketplace integration.
Beyond regulation, sovereign funds, family offices, and banks are backing new market infrastructure.
“With abundant capital, a central global position, and political leadership that embraces digital transformation, the Middle East has become the natural testing ground for scalable tokenisation strategies,” Shemeliak says. “The UAE, Saudi Arabia, and Qatar are not following trends. They are setting the direction.”
That leadership is evident in pilots across the Gulf.
Alongside real estate pilots in Dubai and Saudi Arabia, Abu Dhabi has issued the first blockchain-based bond on a major exchange. Dubai has approved the Middle East’s first tokenised money-market fund and Bahrain’s ATME exchange has tokenised assets from gold to private equity.
While the Middle East has laid a strong foundation for become a global hub, there’s more work to be done.
Lissele Pratt, founder of Capitalixe, a fintech advisory on payments and banking, says, “The region needs deeper institutional adoption where large asset managers, banks, sovereign funds and infrastructure players need to move from pilots to meaningful issuance and allocation in tokenised format.” ((One pilot is Tokinvest’s tokenized racehorse in Dubai, which shows blockchain’s ability to fractionalize unconventional assets.)
Meanwhile, Alsy recommends that for the region to lead, regulatory interoperability will be key. While the Gulf has built progressive rules, it must now ensure those frameworks align internally and connect cleanly with major global centers.
“When banks, asset managers and insurers treat tokenised instruments as part of their core offerings, not side pockets, the shift becomes irreversible,” he says. “If those pieces align, the Middle East will not just participate in tokenised finance - it will help define its global standards.”
