Dubai Begins Real Estate Tokenization Pilot

Dubai has launched a real estate tokenization pilot to integrate blockchain technology into property title deed management.

The Dubai Land Department (DLD) is the first property registration authority in the Middle East to use blockchain for property title deeds, modernizing its operations and enhancing transparency and efficiency in the real estate sector.

Developed in collaboration with the Virtual Assets Regulatory Authority (VARA) and the Dubai Future Foundation (DFF), the programs supports Dubai 2033 real estate strategy, which seeks to leverage emerging technologies to bolster the city’s reputation as a global technology and innovation hub.

The DLD has projected that tokenized real estate could account for 7% of Dubai's total property transactions by 2033, translating to an estimated 60 billion dirhams ($16 billion).

Through real estate torkenization, investors can fractionally own and trade properties, enhancing liquidity and offering more accessible investment opportunities.

However, a 2024 McKinsey report revealed that real estate is one of the slower sectors to adopt blockchain technology compared to other asset classes.

"Broad adoption of tokenization is still far away," the authors said, noting the number could be as low as $1 trillion. "As infrastructure players pivot away from proofs of concept to robust scaled solutions, many opportunities and challenges remain to reimagine how the future of financial services will work."

Nonetheless, Marwan Ahmed Bin Ghalita, director general of DLD, expressed optimism about the project’s potential to “simplify and enhance buying, selling, and investment processes” within Dubai’s real estate market.

In October, Dubai revamped its VARA marketing standards for virtual assets. A "prominent" warning saying that "virtual assets may lose their value in full or in part, and are subject to extreme volatility" is required of enterprises wishing to market virtual assets in the United Arab Emirates.

These stricter rules have not deterred crypto firms from strengthening their presence in the region, however. Just last week, Ripple secured approval from the Dubai Financial Services Authority (DFSA) to offer regulated crypto payments and services within the Dubai International Finance Centre (DIFC).

This approval makes Ripple the first blockchain-enabled payments provider to be licensed by the DFSA and marks Ripple’s first regulatory license in the Middle East.