Following up on the topic highlighted in our previous banking update, SCA has now finalised and published its regulation governing blockchain-based securities and commodity contracts. The new framework, issued under Chairman's Resolution No. (15/Chairman) of 2025, came into effect in July 2025 and provides much-anticipated legal certainty for the issuance, trading and custody of tokenized instruments in onshore UAE.
The final regulation confirms SCA’s principle of technological neutrality, ensuring that a security or commodity contract is subject to the same fundamental legal requirements regardless of whether it is recorded on a traditional register or a Distributed Ledger. The rules apply to “Security Tokens” and “Commodity Token Contracts” but explicitly exclude virtual assets (including cryptocurrencies) and non-security real-world assets from their scope.
A key feature of the regulation is the detailed framework it establishes for trading and custody. As a default rule, Security Tokens and Commodity Contract Tokens may only be traded and settled through a SCA-licensed market or alternative trading facility. However, the regulation provides an exception for over-the-counter (“OTC”) transactions, which are permitted if conducted through a licensed Digital Wallet Service Provider. For investors using self-custody wallets, the rules mandate that such wallets must be pre-authorised and included on a “whitelist” maintained by the issuer or another licensed entity.
The regulation also imposes clear responsibilities on the issuer, who must ensure the integrity of the underlying Distributed Ledger and provide investors with comprehensive information on the token’s rights and the ledger’s mechanics.
By codifying the legal effect of on-chain registration and transfer, SCA has created a robust and enforceable foundation for the growth of tokenized markets in the UAE.