The UAE Securities and Commodities Authority (SCA) has released comprehensive regulations for securities tokens and commodity contract tokens, following its January 2025 draft titled "Securities Tokens and Commodity Token Contracts."
The new framework integrates these tokens—including those issued via distributed ledger technology (DLT)—into the existing virtual asset regulatory landscape, ensuring consistent investor protections and oversight.
Key Clarifications on Token Types and Obligations
The SCA defines securities tokens and commodity contract tokens as digital representations of traditional assets (e.g., equities, bonds, or commodities like gold and oil), subject to the same legal standards as conventional securities.
Core Principles of the Regulations:
- Technology-Neutral Approach: Whether issued on paper, electronically, or via DLT, all tokens must comply with identical legal and regulatory requirements.
DLT-Specific Requirements:
- Must enable holders to exercise ownership rights.
- Ensure data integrity against unauthorized modifications.
- Maintain transparent records of rights, ledger operations, and agreements.
Trading Rules: OTC Transactions via Crypto Wallets
The regulations permit over-the-counter (OTC) trading of these tokens exclusively through:
- Custodial wallets provided by licensed digital wallet service providers.
- Pre-authorized self-custody wallets approved by debtors or compliant middleware services.
A digital wallet service provider is defined as a licensed entity offering custody for tokens via key management.
Market Adoption: EmCoin Leads as First SCA-Regulated Issuer
EmCoin Investment LLC (based in Abu Dhabi) announced plans to become the first SCA-regulated platform for tokenized securities and commodities, bridging digital assets with traditional finance. Users will gain access to:
- Virtual asset trading.
- Global equities and commodities.
- Expert-managed investment portfolios.
UAE’s Tokenization Milestones
- Real Estate: PRYPCO Mint (licensed by VARA and Dubai Land Department) has tokenized two properties for investment.
- DeFi Integration: Cryptopolitan Academy plans to launch passive income strategies via DeFi in 2025.
FAQs
Q1: What’s the difference between securities tokens and utility tokens?
A1: Securities tokens represent regulated financial assets, while utility tokens provide access to a service or product without ownership rights.
Q2: Can international investors trade these tokens?
A2: Yes, provided they adhere to SCA guidelines and use approved wallets.
Q3: How does the SCA ensure DLT security?
A3: By mandating encryption, audit trails, and holder-controlled access.
👉 Explore SCA’s full regulatory text
👉 Learn about EmCoin’s tokenized assets