Dubai's Virtual Assets Regulatory Authority (VARA) and BlackRock-backed tokenization platform Securitize have signed a Memorandum of Understanding (MoU) to advance tokenization and digital asset infrastructure across Dubai and the wider United Arab Emirates.

VARA, established in 2022 as the world's first standalone virtual assets regulator, has since positioned Dubai as one of the more active jurisdictions for licensed digital asset activity. Under the agreement, the two parties will establish a collaborative framework to support regulated tokenization initiatives, foster institutional participation and strengthen Dubai's digital asset ecosystem, according to a Thursday announcement shared with Cointelegraph.

VARA and Securitize aim to support tokenization initiatives in Dubai, including projects initiated by VARA itself, to attract more talent to the emirate and to explore how tokenized financial products should operate under Dubai's regulatory framework.

Tokenization — the issuance of blockchain-based representations of assets such as funds, bonds and stocks — is also gaining traction in other financial technology-focused jurisdictions. Days earlier, the London Stock Exchange reportedly partnered with crypto exchange Kraken to launch tokenized stock trading on the operator's night-time trading venue, offering 24/5 trading.

Related: London Stock Exchange partners with Kraken parent for tokenized UK stocks: FT

Tokenization is evolving into "mainstream" financial infrastructure: Securitize CEO

Carlos Domingo, co-founder and CEO of Securitize, described Dubai as one of the "world's most forward-looking jurisdictions for digital asset innovation," emphasizing the importance of collaborating with regulators as tokenization moves from "concept to mainstream financial infrastructure."

Securitize is best known for managing the tokenized BlackRock USD Institutional Digital Liquidity Fund (BUIDL), one of the highest-profile institutional tokenization products to date, which underpins the platform's close association with the world's largest asset manager.

The announcement builds on VARA's broader licensing activity. At the beginning of July, the regulator granted its 50th virtual asset service provider (VASP) license to tokenization platform Tribe Tokenisation FZE.

When asked about specific infrastructure goals, a VARA spokesperson told Cointelegraph that the MoU's main goal is to create a broad framework for collaboration between the two firms, rather than a specific technological stack or product. She said:

"The intention is to combine VARA's regulatory perspective with Securitize's experience in institutional tokenisation to identify where collaboration can help support the development of trusted, regulated tokenised markets in Dubai."

No specific projects will be announced "at this stage" of the MoU, but the agreement will provide a collaborative framework to "support relevant tokenisation initiatives in Dubai," the spokesperson added.

The agreement comes amid increasing investor demand for tokenized assets. According to data provider RWA.xyz, the total number of RWA holders rose 103% in the past 30 days to 3.2 million, while the total value of tokenized assets increased 2% over the same period to $38.5 billion.

Securitize ranks as the world's largest tokenization platform, with $4.9 billion in tokenized assets under management (AUM), ahead of Ondo Finance in second place with $3.5 billion.

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