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Security Tokens and Commodity Token Contracts in the UAE: Everything You Need to Know About the New SCA Regulations
The Securities & Commodities Authority’s Chairman’s Resolution No. (15/Chairman) of 2025 sweeps security tokens (STs) and commodity-contract tokens (CTs) into the same regulatory net as conventional shares, bonds, sukuk, and derivatives.
Article 1 declares outright technological neutrality: securities or commodity contracts get the same legal treatment whether they’re on paper, a PDF or a public blockchain. The yardstick is the financial instrument’s legal character, not the database it lives on.
That clarity is absolutely fantastic, not least because it echoes the feedback NeosLegal submitted on the draft regulations back in February. We were honoured to serve on the joint SCA–Emirate working group and are thrilled to see many of our suggestions, especially the carve-out for real-world-asset (RWA) tokens, adopted.
Hats off to SCA and all industry contributors for turning a good draft into a landmark rule set, which is clear and avoids intra-jurisdictional ambiguity between the 5 virtual asset regulators we have in the UAE.
Scope at a Glance
| In Scope | What It Means | Out of Scope | Where It Goes Instead |
| Security Tokens (STs) | Digital shares, bonds, sukuk or structured notes whose rights are recorded, exercised and transferred solely on a DLT. | RWA tokens (e.g., gold, real estate) unless the asset itself is a security | Remain unregulated by SCA; may fall under VARA or sector-specific rules |
| Commodity-Contract Tokens (CTs) | On-chain futures, options and other derivatives on commodities. | Virtual-asset tokens that are not securities or derivatives | Supervised by Dubai’s VARA |
| Payment tokens / stablecoins | Central Bank of the UAE |
Article 4 spells the exclusions out in black and white:
“The provisions of this Decision shall not apply to virtual assets” and “shall not apply to Real-World Assets unless the tokenised RWA represents securities.”
Seven Stand-Out Takeaways
- RWA Carve-Out By ring-fencing pure real-asset tokens, the rule avoids dragging property law into capital-markets law. (Victory lap for everyone!)
- Permissioned and Permissionless Chains Welcome Article 11 sets different liability baselines but lets issuers pick either model.
- Self-Custody Recognised Investors may hold their own keys, provided the wallet is on the whitelist—critical for DeFi integrations.
- Whitelisted Wallets Off-exchange transfers must flow through custodial or self-custodial addresses, locking AML/KYC controls directly into settlement.
- Same Rules, New Rails Because of Article 1’s neutrality, every traditional securities rulebook still applies; we’re not reinventing investor protection.
- Issue and Trade Only on a Licensed “Market” An ST/CT must list on a securities-and-commodities Market or alternative trading system licensed by SCA. Today that means Abu Dhabi Securities Exchange (ADX) in Abu Dhabi, Dubai Financial Market (DFM) in Dubai, or another SCA-authorised venue. The definition of “Market” is as per Article 2. We’re eager to see how NASDAQ Dubai located in DIFC respond.
- 24-Hour Settlement Finality Ledger entries locked within a day survive bankruptcy claw-backs, giving tokens a speed advantage over T+2 paper trades.
Market Potential: Why Moving On-Chain Matters
Global equities
US $122 trillion
market cap as of April 2025
Global bonds
roughly US $140.7 trillion
outstanding (2023)
Global suck
US $875 billion
outstanding and climbing toward the US $1 trillion mark
Tokenise even a single-digit percentage of those pools and the UAE could see multi-trillion-dollar DLT pipelines. The pay-offs are obvious: instantaneous settlement, reduced counter-party risk and on-chain cap-table transparency.
What Comes Next?
- Exchanges: ADX and DFM need to work on their infrastructure, now that the regulations are here the technology infrastructure should not be a massive hurdle. The industry is watching whether NASDAQ Dubai extends its matching engine to on-chain assets.
- Infrastructure: Custodians need automated whitelist APIs, and CCPs must adapt to T+0 settlement.
- RegTech tooling: On-chain prospectus disclosures and oracle-based compliance checks can turn Article 10’s information duties into real-time smart-contract logic.
- Flashback: In 2018 we predicted “everything will be tokenised and traded on-chain.” Seven years later, that future has a legal home in the UAE.
Everything will be tokenised ….
The SCA didn’t propose another crypto sandbox; it plugged DLT straight into the country’s mature capital-markets regime. The rule delivers legal certainty today, now it’s on market operators, custodians and tech vendors to catch up.
For issuers and investors, the message is simple: if the underlying instrument is a security as defined under UAE law, and then you tokenize it, only then will it fall under federal securities regulation. If it’s a virtual asset or a tokenized real-world asset (like real estate or a horse) that does not meet the legal definition of a security, it remains outside the scope of the Securities & Commodities Authority.
That distinction is critical, and a major win for legal clarity. Unlike many jurisdictions still struggling to define what a token is, the UAE starts with the nature of the instrument. Tokenisation doesn’t magically transform a real-world asset into a regulated security. That’s a clean, technologically neutral position and it gives founders, investors, and service providers the confidence to build.
