Imagine a digital token that gives buyers a stake in a commercial real estate project in Downtown Dubai. Instead of dealing with legal complexities and heavy paperwork, investors can purchase the token representing a claim on rental income or ownership share. Such tokens are not just theoretical anymore. They fall under a new regulated category in Dubai known as ARVA.
What Are ARVAs?
ARVA stands for Asset-Referenced Virtual Assets that derive their value from RWAs(Real-world assets) or income sources. They may represent direct or indirect ownership, entitlement to future value, or wrapped forms of existing instruments such as real estate, commodities, financial assets, or yield-bearing contracts. ARVAs are officially classified as category 1 virtual assets under VARA’s framework. This designation subjects them to the highest level of regulatory oversight and licensing requirements in Dubai.
Why ARVAs Were Introduced in the Rulebook?
As digital finance pushes into new territory, regulators are stepping up to keep pace with asset tokenization trends. In May 2025, Dubai’s VARA(Virtual Assets Regulatory Authority) rulebook introduced the ARVA framework to bring clarity to a growing segment of virtual assets that claim value from real-world assets. These include physical commodities, real estate, financial instruments, or even income streams.
The need was clear: without proper oversight, asset-backed tokens risked being deployed without transparency, accountability, or enforceable rights for buyers. The ARVA rulebook addresses these concerns head-on by requiring defined standards for reserve backing, disclosures, redemption, and governance.
Who Can Issue ARVAs in Dubai?
Only entities holding a valid VARA license for category 1 issuance are permitted to launch ARVAs. Each issuance must be individually approved. Issuers are required to comply with five mandatory rulebooks that cover:
- Company Rulebook
- Compliance and Risk Management Rulebook
- Technology and Information Rulebook
- Market Conduct Rulebook
- VA Issuance Rulebook
VARA may also designate an issuer as a significant ARVA issuer based on parameters like asset volume, number of holders, or operational complexity. Entities in this category must adopt stronger governance practices, issue more detailed public disclosures, and undergo stricter scrutiny.
Disclosure Requirements Mandatory for Every ARVA
To ensure transparency, two documents are compulsory for every ARVA offering:
1. Whitepaper
Issuers must disclose the following details in the whitepaper:
- Type and value of Reference Assets
- Methodology to maintain stable value
- Creation/redemption policies
- Details of Reserve Assets custody
- Risk factors for Reference and Reserve Assets
2. Risk Disclosure Statement
It will summarize all material risks, such as legal, financial, technical, and operational, using simple, understandable language for non-specialist investors.
Both documents must be made publicly accessible before tokens are offered. Any updates to the asset’s structure or operations must reflect in the documentation, which must remain archived for at least eight years after the asset goes out of circulation.
Reserve Backing and Redemption Standards
Any ARVA making a value claim based on external assets must maintain full backing by approved reserve assets. These must be:
- Held with licensed custodians and kept separate from the issuer’s other assets
- Liquid enough to process redemptions quickly
- Verified through quarterly independent audits
Investors have a right to redeem ARVAs at par value, subject to clearly defined redemption methods stated in the whitepaper. Redemptions must be processed within a working day, barring significant technical or market disruptions. Fees cannot be charged to investors for redeeming tokens.
Marketing Conduct and Financial Thresholds
ARVA issuers are expected to present accurate, fair, and non-promotional information when marketing their tokens. Misleading labels, such as claiming price stability without appropriate reserve structures, are prohibited.
To support financial integrity, issuers must meet capital adequacy requirements, including:
- AED 1.5 million in paid-up capital
- An additional 2% of the total circulating value of ARVAs
Issuers are also expected to assess and disclose the environmental impact of the assets they issue, especially where reserve assets involve real-world physical resources.
Benefits for Investors
- Audited Reserve Backing: Issuers are required to undergo quarterly audits of their reserve assets. This ensures that every ARVA claiming a real-world value has verifiable backing, which gives investors assurance about the asset’s integrity.
- Redemption Rights and Par Value Claims: ARVA holders are entitled to redeem tokens at fair value through clearly defined methods. This creates trust and reduces the risk of being stuck with illiquid or overhyped tokens.
- Legal and Regulatory Clarity: Since ARVAs are regulated under VARA’s framework, investors benefit from protections that reduce uncertainty around how the token operates, how disputes are handled, and what compliance obligations the issuer must meet.
- Reduced Exposure to Unclear or Unregulated Tokens: ARVAs must state their use case, rights, reserve model, and redemption structure upfront. This moves investors away from speculative or utility-based tokens with vague promises and toward structured digital products with real-world linkage.
- Confidence for Retail and Institutional Participation: Clear compliance, disclosures, and audit requirements make ARVAs accessible and trustworthy for both individual investors and institutional participants who require stronger risk controls.
Concluding Note
Tokenization is becoming more than a buzzword. ARVAs bring structure to this evolving market by linking real-world value with verifiable compliance obligations. For anyone evaluating digital investment products that offer a bridge to real assets, be it real estate, revenue sharing, or fractionalized ownership, understanding Dubai’s ARVA framework is no longer optional. It’s part of responsible investing.
Antier, a recognized leader in blockchain and digital asset consulting, is uniquely positioned to guide businesses, issuers, and financial entities through Dubai’s evolving virtual asset regulations. With in-depth experience in token engineering, compliance frameworks, and technical infrastructure, Antier helps clients design, launch, and manage ARVAs in full alignment with VARA’s rulebook.
Antier’s Approach to Supporting ARVA-Compliant Projects
- Regulatory Assessment: Reviews the nature of the virtual asset to confirm if it qualifies as an ARVA under VARA guidelines.
- Token Structure Design: Defines ownership, entitlement, or income-linked rights clearly aligned with ARVA classification.
- Audit & Reporting Coordination: Supports setup of quarterly audit schedules for reserve verification and aligns reporting formats with VARA’s ongoing disclosure requirements.
- End-to-End Compliance Guidance: Offers advisory throughout approval, launch, and post-issuance stages to maintain regulatory alignment.
- Tailored Solutions for Use Cases: Adapts the approach for tokenized real estate, income-sharing products, or RWA-backed instruments.
Author
Global General Counsel
Antier Solutions
About
With over 28 years of extensive experience in banking and corporate finance, along with more than 11 years in financial and business consulting, Gaayan offers a unique blend of expertise that spans multiple domains. As a CFA (ICFAI) charterholder, Gaayan’s career has been distinguished by a deep commitment to excellence in both financial management and legal practice.
