In our insights article of 5 November 2025, “The DFSA’s new crypto token proposal: A shift toward market-led oversight”, we outlined the regulator’s intention to move away from a prescriptive model of oversight. The Dubai Financial Services Authority (DFSA) has now formally updated its rules on Crypto Tokens in the DIFC, accompanied by supervisory guidelines and a policy statement issued on 15 December 2025. These changes will take effect on 12 January 2026. Firms providing financial services involving crypto tokens must now determine, on a reasoned and documented basis, whether each token meets the DFSA’s suitability criteria.
Responsibility for assessment is placed directly on market participants, with the expectation that firms will demonstrate compliance through structured processes and objective evidence. The supervisory guidelines set out how firms should approach suitability assessments. The evaluation is context-specific, meaning a token may be suitable for one activity or client base but not for another. Under this criterion, firms are expected to assess whether a crypto token demonstrates a clear and practical use case, and whether its activity can be effectively traced and monitored on-chain on an ongoing basis.
The regulator has provided explicit indicators to guide firms in conducting this suitability assessment. Notably, the DFSA highlights negative indicators, such as tokens that are purely speculative in nature; like meme coins, which lack real-world application or utility, and concerns about supply concentration by founders or affiliates. Conversely, the DFSA also identifies positive indicators, including tokens with a genuine use case, transparent governance arrangements, and the ability to monitor on-chain activity for compliance purposes. Tokens with a more diversified supply and limited concentration among a small group of holders are viewed more favourably, as they reduce risks of market manipulation and enhance stability. The regulatory status criterion looks at whether tokens have been formally assessed or approved by regulators in other jurisdictions and whether the issuer is subject to ongoing supervision, with favorable views toward tokens reviewed under credible licensing regimes. A token’s market size and liquidity, with transparent pricing across exchanges and verifiable on-chain supply metrics, together with mature blockchain resilience and response capabilities, contribute to its suitability; taken together, the DFSA’s framework promotes accountability as rules take effect in January 2026.
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