This decision marks the transition from testing the innovation (the REES project was launched in March last year) to its full functioning within the framework of the UAE legislation.
What is real estate tokenization?
Tokenization is the splitting of a real estate object into many small digital shares (tokens). Instead of buying an apartment or villa in its entirety for millions of dirhams, the investor purchases a token, which is a digital certificate of ownership of a part of this object.
Each token is securely linked to the official documents of the Land Department. If you have a token, you are legally a co-owner of a building or apartment.
Previously, at the first stage, investors could only purchase tokens and hold them for a certain period of time. Now, with the entry into the second stage, a full-fledged secondary market is being created. This means that token holders will be able to sell their shares to other investors without waiting for the completion of construction or the sale of the entire facility.
According to the Land Department, about 7.8 million tokens will be available for trading at the initial stage.
Tokenization is expected to be of interest to several categories of people.:
1. For novice investors: the entry threshold is reduced from hundreds of thousands to symbolic amounts. According to experts, it will be possible to invest in Dubai square meters from only 2000 dirhams.
2. Residents of the Emirate who are not ready for a mortgage.This is a chance to get a stake in profitable real estate without large loans and debt obligations.
3. Experienced market players.Now it is possible to diversify risks by distributing funds among dozens of objects, rather than investing everything in one lot.
Unlike many spontaneous crypto projects, Dubai's initiative is fully regulated by the state. The system was developed under the supervision of the Office for the Regulation of Virtual Assets (VARA) and integrated into the official real estate registry.
The authorities promise transparency of transactions and protection against fraud: trades will take place only on approved platforms with strict pricing controls. Now the implementation process is proceeding gradually so that the government can monitor investor behavior and liquidity before scaling up the project.
Source: Gulf News
