The Dubai Financial Services Authority (DFSA) has published “Scaling Tokenisation: The Road Ahead,” a white paper examining how tokenised financial products and market infrastructure can develop beyond isolated applications. Drawing on practitioner perspectives, it identifies trusted custody, digital settlement and interoperable infrastructure as conditions for broader adoption, supported by legal certainty and regulatory coordination. Adoption remains concentrated in specific products and use cases. The publication presents market observations rather than regulatory policy or supervisory expectations. Custody priorities extend beyond securing private keys to establishing ownership records, segregating client assets and allocating responsibility for operational failures. Regulated custody can help institutions manage exposure but does not eliminate risks within blockchain protocols or the bridges connecting them. Trusted digital settlement could involve regulated stablecoins, tokenised commercial bank deposits or wholesale central bank money, with different models potentially serving complementary roles. Simultaneous exchange of securities and cash may reduce settlement risk, but those benefits need to be weighed against additional liquidity and prefunding requirements and the possible loss of netting efficiencies. Connecting tokenised platforms with one another and with traditional infrastructure requires common legal, operational and technical standards, not just technological links. Greater consistency across jurisdictions could reduce fragmentation without requiring full regulatory harmonisation. Commercial adoption also depends on sufficient participation and liquidity, with measurable benefits that justify migration costs. Although tokenisation appears unlikely to pose material financial stability risks at its current scale, growing connectivity and automation could transmit stress faster and increase dependencies on shared service providers. Governance, operational resilience and liquidity management therefore remain central to market design.
Dubai Financial Services Authority publishes white paper on conditions needed to scale tokenisation
The Dubai Financial Services Authority has issued a white paper assessing how tokenisation can expand beyond isolated products and platforms, without setting regulatory policy. It highlights custody safeguards, trusted digital settlement and common standards connecting markets across jurisdictions. Broader adoption also depends on liquidity and a viable commercial case, while greater connectivity could accelerate the transmission of financial stress.