Tokenizing real-world assets (RWAs) is transforming ownership, accessibility, and liquidity across industries. For platforms like Tiamonds, which bring diamonds, gold, sapphires, and other physical assets onto the blockchain, regulatory compliance across jurisdictions is vital.
This blog offers a comprehensive, country-by-country overview of the tokenization landscape. It highlights the legal frameworks in the United States, the United Arab Emirates (specifically Dubai), key European countries, major Asian economies, and the broader Middle East region.
The focus is on how these rules impact tokenized asset trading, custody, and investor protection, especially regarding Tiamonds’ operations.
Key Highlights
- Tokenization of Real World Assets (RWAs) is regulated differently across countries, often based on securities, commodities, or digital asset laws.
- Europe’s MiCA regulation brings clarity to crypto-assets, including asset-backed tokens.
- Dubai leads the Middle East with specialized frameworks for tokenized assets.
- Tiamonds aligns with regulated jurisdictions to ensure investor security and operational transparency.
- Understanding these legal environments is critical for users and partners engaging with Tiamonds globally.
Introduction to Real-World Asset Tokenization
Tokenization involves converting ownership rights of physical assets into digital tokens on a blockchain. Tiamonds has pioneered this for luxury diamonds, gold, and sapphires. These tokens offer 24/7 liquidity and borderless transfers. However, such innovation must operate within national legal boundaries, which vary significantly worldwide.
Regulatory Landscape: United States
The United States has a well-established yet fragmented regulatory environment. Asset tokenization often falls under securities law if the token meets the criteria of the Howey Test.
- Securities and Exchange Commission (SEC): Treats asset-backed tokens as securities when they promise profit expectations from third-party efforts.
- Commodities Futures Trading Commission (CFTC): May regulate tokens representing commodities, such as gold or diamonds.
- State-Level Licenses: Platforms may also be required to obtain money transmitter licenses, depending on their operating location.
Policy Shift Under the Trump Administration (2025):
The new Trump administration has voiced support for the digital asset sector, advocating for more innovation-friendly crypto policies. This includes calls to limit SEC overreach, streamline regulatory clarity for blockchain startups, and promote the United States as a hub for Web3 innovation. While concrete legislation is still evolving, this political backing signals a more optimistic climate for tokenized assets and crypto entrepreneurs in the years to come.
Dubai and the UAE: A Crypto-Forward Hub
Dubai has emerged as a global leader in digital asset regulation through the establishment of the Virtual Assets Regulatory Authority (VARA). With the May 2025 Rulebook update, Dubai officially legalized the issuance, listing, and trading of tokenized real-world assets (RWAs), creating the clearest and most comprehensive legal infrastructure in the world.
- VARA Framework: Clearly defines virtual asset activities, including token issuance, exchange operations, custody, and advisory services.
- Free Zones: The Dubai International Financial Centre (DIFC) operates under its framework, supervised by the Dubai Financial Services Authority (DFSA).
- Tokenized Securities: Must meet clear requirements on registration, disclosure, capital adequacy, and operational integrity.
How to Tokenize Real-World Assets (RWAs) in Dubai
Dubai’s new regulatory regime is not a sandbox or pilot; it is full legislation backed by enforceable rules:
- RWA tokens are classified as Asset-Referenced Virtual Assets (ARVAs) under the updated 2025 VARA Rulebook.
- Secondary market listing is permitted under a valid Variable Annuity (VARA) license.
- Broker-dealers and exchanges are legally authorized to trade tokenized Real World Assets (RWAs).
- Issuers must obtain a Category 1 license, maintain capital reserves, undergo monthly audits, and provide full disclosures, including white papers and risk statements.
Dubai’s framework addresses the major pain points that plagued the 2018 security token wave, namely, lack of trading venues, regulatory clarity, and investor protection.
Key Requirements for ARVA Issuers
- Minimum Capital Requirement: AED 1.5 million (~$408,000) or 2% of total reserve assets
- Audit Obligations: Monthly audits and reserve verification
- Allowed Collateral Types: Real estate, private credit, income-generating assets
- Legal Flexibility: Supports both conventional and Shariah-compliant structures
Unlike jurisdictions still in consultation or transition phases (such as Singapore or the EU with MiCA), Dubai has executed and delivered a live, enforceable infrastructure. Over $500 billion in tokenized assets is projected for next year, and Dubai has positioned itself to capture a leading share.
European Union and EEA: MiCA and Country-Level Highlights
The Markets in Crypto-Assets Regulation (MiCA) is set to take effect in 2025, introducing a harmonized legal framework across the European Union for crypto-assets not previously governed by existing financial legislation.
- MiCA Scope: Covers three categories – Asset-Referenced Tokens (ARTs), Electronic Money Tokens (EMTs), and Utility Tokens.
- Licensing Requirements: Issuers and crypto-asset service providers must obtain authorization from their national competent authorities and comply with governance, capital, transparency, and reserve requirements.
Germany
- Under BaFin (Federal Financial Supervisory Authority), tokens representing real-world assets are typically treated as securities or investment products.
- Platforms handling such tokens must ensure licensed custody, full AML/KYC compliance, and transparent operations for investors.
Liechtenstein
- Governed by the Token and Trusted Technology Service Providers Act (TVTG), which is also known as the Blockchain Act. Under it, Liechtenstein offers one of the most comprehensive legal frameworks in Europe for tokenization.
- The law treats tokens as containers of rights, allowing tokenized representations of physical assets, financial instruments, or legal claims.
- Issuers must register with the Financial Market Authority (FMA), meet capital and operational requirements, and adhere to AML, CFT, and investor protection standards.
- The TVTG also integrates seamlessly with EU Single Market laws through Liechtenstein’s EEA membership, making it an ideal hub for compliant RWA projects.
Switzerland
- Although not in the EU or EEA, Switzerland has a highly advanced regulatory approach overseen by FINMA.
- Tokens are categorized as payment, utility, or asset tokens, each with specific regulatory pathways.
- Asset-backed tokens (including those representing real-world assets) require a securities prospectus, and firms must comply with AML obligations and provide transparent investor disclosures.
5. Asia’s Approach to Asset Tokenization
Singapore
- The Monetary Authority of Singapore (MAS) classifies tokens based on their function.
- Tokens backed by real-world assets may be treated as capital market products.
- Licenses under the Payment Services Act or the Securities and Futures Act may be required.
Japan
- Governed by the Financial Services Agency (FSA).
- Asset-backed tokens can be categorized under the Type II Financial Instruments.
- Exchanges must be registered, and custodial functions are subject to strict segregation rules.
6. Middle East Region Beyond UAE
Saudi Arabia
- Still developing a clear crypto regulatory framework.
- Sandbox projects by the Saudi Arabian Monetary Authority (SAMA) allow for controlled experimentation.
- Asset-backed tokens may be regulated under capital market laws administered by the Capital Market Authority (CMA).
Bahrain
- The Central Bank of Bahrain (CBB) has a clear regulatory sandbox.
- Allows for tokenized assets under digital asset platform licenses.
- Asset custodians and issuers must meet capital and operational standards.
Summary and Compliance Outlook for Tiamonds
As the global regulatory landscape for tokenized real-world assets (RWAs) matures, platforms like Tiamonds are navigating this complexity with strategic foresight and alignment across jurisdictions. Legal compliance, investor trust, and operational transparency remain core to our expansion model.
Tiamonds is headquartered in Liechtenstein, operating under one of the most robust and forward-thinking blockchain legal frameworks globally, which is the Token and Trusted Technology Service Providers Act (TVTG). This positions Tiamonds within the European Economic Area (EEA), enabling seamless legal compatibility with EU laws, including the Markets in Crypto Assets (MiCA) regulation.
In alignment with the Markets in Crypto-Assets Regulation (MiCA), Tiamonds has already registered its whitepaper for review with the European Securities and Markets Authority (ESMA). This milestone places Tiamonds among the early movers toward full MiCA compliance, ensuring that our operations, which include issuance, custody, and trading, meet the highest regulatory standards across the European Union.Tiamonds isn’t just responding to compliance; rather, we’re leading with it.
By embedding legal clarity into every layer of token issuance, custody, and trading, we ensure our users and partners can engage with tokenized assets confidently, securely, and globally.
