GCC Cooperation on Tokenization Standards: Regional Harmonization Efforts

GCC securities regulators are developing harmonized tokenization standards through the GCC Securities Regulators Forum’s Digital Assets Working Group — with the Saudi CMA framework serving as the baseline for regional discussion and 4 bilateral cooperation agreements already operational.

GCC Securities Regulators Forum

The GCC Securities Regulators Forum, established in 2009, provides the institutional framework for regional coordination on capital markets regulation. In 2024, the Forum created the Digital Assets Working Group (DAWG) to address the proliferation of national tokenization frameworks across the six GCC member states and the growing need for cross-border interoperability.

The DAWG comprises regulatory representatives from:

Saudi Arabia’s CMA framework — the most comprehensive in terms of license categories (7 categories), investor protection tiers, and Sharia compliance integration — serves as the primary reference document for DAWG discussions.

Harmonization Priorities

The DAWG has identified five priority areas for GCC tokenization harmonization:

1. Cross-Border Token Recognition: Establishing mutual recognition frameworks so that a tokenized sukuk issued under Saudi CMA authorization can be offered to qualified investors in other GCC jurisdictions without requiring separate regulatory approval in each market. The initial target is Saudi-UAE bilateral recognition, followed by Saudi-Bahrain and broader GCC coverage by 2028.

The CMA’s international regulatory cooperation framework provides the bilateral agreement template. As of Q1 2026, Saudi Arabia has executed cooperation agreements with ADGM (Abu Dhabi), VARA (Dubai), DFSA (DIFC), and CBB (Bahrain). These agreements cover information sharing, joint supervision protocols, and mutual assistance in enforcement actions.

2. Settlement Infrastructure Interoperability: Connecting Tadawul’s digital securities platform (R3 Corda) with ADX’s tokenization infrastructure and DFM’s digital securities system. The technical challenge is cross-chain settlement — enabling atomic DvP across different DLT protocols. Tadawul has initiated technical discussions with ADX and DFM for cross-border digital securities trading, with Saudi Blockchain Lab providing interoperability protocol research.

3. Custody Standards Alignment: Harmonizing digital asset custody standards across GCC jurisdictions to enable cross-border custody arrangements. Current custody standards vary significantly — the Saudi CMA requires 95% cold storage for client assets, while VARA mandates 70%, and Bahrain CBB specifies 80%. The DAWG is developing minimum GCC custody standards that each jurisdiction can exceed but not fall below.

4. AML/CFT Coordination: All six GCC states are FATF members (Saudi Arabia since 2019, UAE founding member, Bahrain since 2024). This shared FATF membership provides a common baseline for anti-money laundering and counter-terrorism financing requirements in digital asset activities. The DAWG is coordinating Travel Rule implementation across GCC tokenized securities markets, establishing shared suspicious transaction reporting protocols, and developing a regional blockchain analytics capability for cross-border enforcement.

5. Disclosure Harmonization: Aligning disclosure requirements for tokenized securities offered across GCC markets. Saudi Arabia’s disclosure framework is the most detailed in the GCC, requiring technology risk disclosure, smart contract audit reports, Sharia compliance certification, and beneficial ownership transparency. The DAWG is developing a common GCC disclosure template for cross-border token offerings.

Bilateral Cooperation Agreements

Saudi Arabia’s 4 operational bilateral cooperation agreements provide the foundation for GCC harmonization:

Saudi CMA — ADGM FSRA: Signed Q3 2024. Covers mutual recognition of qualified investor classifications, joint sandbox cooperation for cross-border tokenization firms, and shared market surveillance for dual-listed digital securities. The agreement facilitated 2 Saudi tokenization startups accessing the ADGM RegLab and 1 ADGM-licensed firm entering the CMA sandbox.

Saudi CMA — Dubai VARA: Signed Q4 2024. Focuses on enforcement cooperation for unauthorized digital asset services, information sharing on market surveillance findings, and coordination on investor protection for cross-border retail digital asset offerings. This agreement supports the Saudi CMA vs. VARA regulatory comparison.

Saudi CMA — DIFC DFSA: Signed Q1 2025. Covers institutional tokenized securities — enabling Saudi-listed digital bonds to be offered to DIFC-based institutional investors through a streamlined cross-border offering process.

Saudi CMA — Bahrain CBB: Signed Q2 2025. The most comprehensive agreement, covering cross-border tokenized sukuk distribution, shared custody arrangements, and coordinated Sharia compliance standards for digital Islamic finance products. Bahrain’s early-mover status (CBB digital asset module since 2019) provides useful operational experience that complements Saudi Arabia’s institutional scale.

Cross-Border Settlement Architecture

The DAWG has commissioned the Saudi Blockchain Lab and its international partners to develop a technical architecture for GCC cross-border tokenized securities settlement:

Hub-and-Spoke Model: A proposed GCC Digital Securities Gateway connecting national DLT platforms (Tadawul/R3 Corda, ADX, DFM) through a central interoperability layer. Settlement would use either bilateral CBDC arrangements (building on Project Aber between SAMA and Central Bank of UAE) or authorized stablecoins pegged to local currencies.

DVP Across Borders: Extending Tadawul’s T+0 atomic settlement capability to cross-border transactions. The technical challenge is achieving atomic DvP when the securities leg settles on Saudi R3 Corda and the cash leg settles on a different national payment infrastructure. Hashed Timelock Contracts (HTLCs) and cross-chain bridges are under evaluation.

Edaa as Regional CSD: Saudi Arabia has proposed that Edaa’s DLT-integrated depository infrastructure serve as the hub CSD for cross-border GCC digital securities — leveraging Edaa’s custodian-of-last-resort capability and zero settlement failure record. This proposal is under DAWG review.

Economic Scale of GCC Tokenization

The combined GCC GDP exceeds $2 trillion, with total exchange market capitalization above $4 trillion. Tadawul alone represents the 9th largest exchange globally by market capitalization according to the World Federation of Exchanges, with 400+ listed companies and SAR 4.76 billion in average daily trading value as of January 2026. A harmonized GCC tokenization market would represent the largest unified digital securities market outside of the United States and European Union.

Sharia Compliance Coordination

One area where GCC harmonization is most advanced is Sharia compliance standards for tokenized securities. All GCC states share Islamic finance as a core financial sector component, and the AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions), headquartered in Bahrain, provides the regional reference framework.

The DAWG’s Sharia harmonization work covers:

• Common Sharia screening criteria for tokenized assets across GCC markets
• Mutual recognition of Sharia board certifications across jurisdictions
• Standardized Sharia-compliant smart contract templates for tokenized sukuk
• Coordinated guidance on Islamic fintech tokenization products

Vision 2030 and Regional Leadership

Saudi Arabia’s Vision 2030 Financial Sector Development Program positions the Kingdom as the GCC’s financial sector leader. GCC tokenization harmonization supports this objective by establishing Saudi Arabia as the standard-setter — the CMA framework as the regional reference, Tadawul as the primary exchange, and Edaa as the regional depository hub.

Fintech Saudi supports GCC cooperation through its international partnership program with 15+ global fintech hubs, including Bahrain Fintech Bay and Abu Dhabi’s Hub71. The Fintech Saudi-CMA accelerator accepts applications from GCC-based startups seeking Saudi market access.

The CMA’s target of SAR 50 billion in tokenized securities by 2028 — combined with GCC cross-border access — could create a regional digital securities market exceeding $20 billion in outstanding instruments by 2030.

Related network sites: Saudi Tokenized Real Estate | Dubai Tokenisation | UAE Tokenization Regulations | Capital Tokenization

Sovereign Digital Sukuk and Cross-Border Distribution

The most significant near-term catalyst for GCC tokenization cooperation is Saudi Arabia’s planned sovereign digital sukuk program (SAR 5 billion target, 2027 launch). Cross-border distribution of Saudi sovereign digital sukuk to GCC institutional investors requires harmonized custody standards, compatible settlement infrastructure, and mutual recognition of investor classification frameworks — all of which the Forum’s working group is developing. The sovereign sukuk program creates both the commercial incentive and the technical requirement for accelerating GCC harmonization from a policy discussion to operational infrastructure.

The Saudi Blockchain Lab’s cross-chain interoperability research directly supports GCC settlement interconnection. The Lab’s Hashed Timelock Contract (HTLC) specifications for cross-chain DvP enable atomic settlement between Saudi Arabia’s R3 Corda infrastructure and the UAE’s NASDAQ DLT system, potentially allowing a tokenized sukuk listed on Tadawul to settle atomically through ADX for UAE-based investors. SAMA’s Project Aber (bilateral CBDC with the Central Bank of UAE) and BIS mBridge participation provide the payment-leg infrastructure for cross-border digital securities settlement.

The CMA’s 4 bilateral agreements with GCC regulators (UAE SCA, Central Bank of Bahrain, QFCRA, Central Bank of Kuwait) provide the regulatory cooperation channels through which cross-border tokenized securities operations will be supervised. The Forum’s planned mutual recognition framework — with Saudi Arabia’s CMA framework as the baseline — would enable CMA-licensed entities to distribute tokenized securities across the GCC through a streamlined notification process rather than separate licensing in each jurisdiction.

PIF’s exploration of tokenization for portfolio company equity adds a sovereign wealth fund dimension to GCC cooperation. PIF investments span all six GCC economies, and tokenized portfolio company equity could be traded across regional exchanges if harmonized settlement and custody infrastructure is established. This sovereign-scale use case provides the institutional demand signal that justifies the Forum’s infrastructure investment in cross-border tokenization interoperability.

The Saudi Digital Academy and Fintech Saudi contribute to GCC cooperation through talent exchange programs and joint accelerator initiatives with Bahrain Fintech Bay and Abu Dhabi’s ADGM RegLab. These programs ensure that the human capital needed to operate cross-border tokenized securities infrastructure is developing in parallel with the regulatory and technical harmonization work. The Forum’s target of a unified GCC digital securities market by 2030 — if achieved — would create a $3.5 trillion combined institutional investor market for tokenized securities that rivals the EU’s MiCA-enabled single market.

The CMA’s international cooperation agreements with GCC regulators — ADGM, VARA, DFSA, and CBB — provide the bilateral frameworks within which multilateral GCC cooperation operates. These agreements cover information sharing, supervisory cooperation, and mutual assistance provisions that enable cross-border enforcement for digital asset activities spanning multiple GCC jurisdictions.

Saudi Arabia’s FATF membership (since 2019) and the FATF’s 2024 “largely compliant” mutual evaluation provide the Kingdom with the international compliance credibility that supports its leadership role in GCC tokenization cooperation. All GCC states are either FATF members or FATF-Style Regional Body (FSRB) members through MENAFATF, ensuring a baseline AML/CFT compatibility that supports cross-border tokenized securities trading.

Elm Company’s Nafath digital identity platform represents a potential model for GCC-wide digital identity interoperability — enabling cross-border investor onboarding through mutually recognized identity verification systems. The Saudi Digital Academy’s certification programs could extend to GCC partners through the talent exchange programs coordinated by Fintech Saudi, addressing the workforce development needs across the region. The IOSCO Fintech Task Force — which the CMA co-chairs through its Crypto-Assets Working Group — provides the international standards framework that GCC cooperation references when developing harmonized tokenization regulation. The SEC and ESMA engagement through IOSCO working groups ensures that GCC harmonization aligns with the two largest international securities regulatory frameworks, facilitating eventual GCC-international interoperability for tokenized securities trading and cross-border custody. The Edaa custodian-of-last-resort mechanism represents a Saudi innovation that GCC harmonization discussions reference as a potential regional standard for investor asset protection in cross-border digital securities custody. The GCC Securities Regulators Forum’s quarterly meetings — with the Digital Assets Working Group reporting directly to the Forum chair — provide sustained institutional momentum for harmonization efforts, with Saudi Arabia’s technical standards and regulatory frameworks serving as the primary reference model given the Kingdom’s advanced implementation status.

For ecosystem inquiries: info@sauditokenisation.com