Dubai has launched the first licensed tokenized real estate project in the Middle East and North Africa (MENA) region, showcasing interest in real-world asset tokenization in one of the world's emerging cryptocurrency hubs.
Partners in the project include the Dubai Land Department (DLD), the Central Bank of the United Arab Emirates, and the Dubai Future Foundation, according to an announcement from the Dubai government. The tokens will be tradable on the newly launched platform 'Prypco Mint', with Zand Digital Bank designated as the bank for the pilot phase of the project.
On May 19, the Dubai Virtual Assets Regulatory Authority (VARA) updated its rules to include the tokenization of real-world assets (RWA), allowing such tokens to be traded on secondary markets.
The project will allow individual investors to buy tokenized shares in 'ready-to-own properties in Dubai', with investments starting from 2,000 Emirati dirhams (545 dollars). During the pilot phase, all transactions will be conducted in dirhams (AED), without using cryptocurrencies. While the pilot program will be limited to holders of United Arab Emirates identification, there are plans to expand it globally.
In April, the DLD and VARA agreed to link Dubai's real estate registration with property tokenization. The stated goal was to attract global investors and enhance liquidity in Dubai's real estate market. The project was initially announced in March.
As a coveted destination for cryptocurrency entrepreneurs, the United Arab Emirates is positioning itself as a cryptocurrency hub. In May, Dubai, an emirate within the country, partnered with Crypto.com to help facilitate cryptocurrency payments for government services.
The real estate tokenization market could reach $19.4 billion by 2033.
The real estate sector is one of many areas of real-world asset tokenization that is poised for advancement in the coming years. It fulfills some of the key promises of blockchain technology, providing liquidity to relatively illiquid assets and granting greater accessibility to retail investors.
According to Custom Market Insights, the global real estate tokenization market is expected to reach a market capitalization of $19.4 billion by 2033, growing at a compound annual growth rate of 21%. The three types of real estate—residential, commercial, and industrial—will play an important role.