Newsletter #14: Dubai's RWA tokenisation experiment has begun

Shorooq-backed Prypco launches its real estate tokenisation pilot on May 25 (Sunday)

May 24, 2025

Digging into Prypco’s real estate tokenisation pilot 🏨

If you currently live or have travelled to Dubai recently, you may have come across the craze around real world asset (RWA) tokenisation, particularly around the city’s favourite asset class — real estate.

The idea of RWA tokenisation is pretty simple — you’re chopping assets up into little pieces/fractions, whether it’s gold or stakes in a PE/VC fund — placing them on a blockchain to allow these tokens to be traded by retail investors.

The benefits are plenty. You’re democratising access to traditionally hard-to-reach asset classes, injecting new liquidity into illiquid markets and so on.

Just a week ago, the Dubai Land Department (DLD) and Virtual Assets Regulatory Authority (VARA) gave the greenlight to Shorooq Partners-backed startup Prypco to allow UAE residents to trade tokens of real estate projects in the country.

This is part of a wider nationwide rollout which will involve other RWA tokenisation platforms like Tokinvest, which I wrote about earlier this week.

The details of Dubai’s nationwide rollout are still sketchy. Prypco also declined to give me a video/phone interview. However, I was able to dig out a couple of interesting nuggets.

What does Prypco’s pilot launch entail? 🧩

Phase One is only open to Emirate ID holders (Emirati residents). Blockchain for the pilot project is Ripple; Bank partner is Zand Bank.
Minimum ticket price: AED 2,000 (US$545)
8-12% net annual ROI (defined as monthly rental income + capital appreciation)
3 month lock-in period from the date that property is funded
You may own up to a maximum of 20% of total tokens in a single property. Tokens do not expire.
Cryptocurrencies not accepted for payment, only fiat.
Tokens can be accessed on the Dubai Rest App and the Prypco Mint Wallet
More than 2,400 investors (as of 22 May) registered interest to co-invest in first ever tokenized title property, according to Mahmoud AlBurai, senior director, real estate policies and innovation, Dubai Land Authority
No publicly released properties or real estate developers (yet)

But what caught my eye was the fees 👀

2% fee on investment amount
1% exit fee
0.5% annual management fee
Capital appreciation fee of <15% based on the property value’s increase (!!)
2% DLD fee (versus standard 4%)
Any other third-party fees will be found on the property card with a detailed breakdown

Is it me, or does a capital appreciation fee of up to 15% sound kinda steep? Based on this, I could potentially lose up to 20% or one-fifth of the trade just on fees alone.

It’s pretty ironic too considering this is Dubai, which has long prided itself as a zero capital gains tax city…

Anyway, I quickly took to ChatGPT to give me a rundown of the fee structure for publicly traded stocks on Dubai public exchanges for a comp. Here’s what I got:

Capital Gains Tax 💰

Individuals: There is no capital gains tax on the sale of shares for individuals in the United Arab Emirates. This means that any profit made from selling shares is not subject to taxation.

Transaction Fees 📈

While there is no capital gains tax, selling shares does incur transaction fees, which can vary depending on the exchange and broker. For example, Emirates NBD Securities outlines the following fees:

Dubai Financial Market (DFM):
- Broker Commission: 0.125% + VAT
- Market Commission: 0.05% + VAT
- Securities and Commodities Authority (SCA) Fee: 0.05%
- Central Depository Services (CDS) Fee: 0.05% + VAT
- Total: Approximately 0.275% + VAT per transaction
- Additional: AED 10.50 per transaction
Nasdaq Dubai:
- Broker Commission: 0.13% + VAT
- Trading Fee: 0.05% + VAT
- Clearing, Settlement, and Depository (CSD) Fee: 0.05% + VAT
- Total: Approximately 0.23% + VAT per transaction
- Additional: USD 3.15 per transaction

I’d be super curious to see how liquid and volatile these trades are going to be to warrant the kind of fees Prypco is asking for. Prypco Mint officially launches on May 25 (Sunday).

But regarding why Dubai is going so hard on RWA tokenisation at all — that is a separate story I’m working on and will be delivering to your inbox very soon ;) Stay tuned.