New Collaboration to Regulate Machine Economy in Dubai
peaq, a prominent player in the Machine Economy sector, has partnered with Dubai’s Virtual Assets Regulatory Authority (VARA) to establish regulatory frameworks for on-chain robotics, Decentralized Physical Infrastructure Networks (DePIN), and tokenized machinery. This memorandum of understanding (MOU), signed during the GITEX 2025 event, aims to advance the development of the Machine Economy in the UAE, encompassing regulatory standards, educational initiatives, and data reporting measures.
Understanding the Machine Economy
The concept of a “Machine Economy” envisions a future where intelligent machines function as independent economic entities, capable of executing transactions, negotiating contracts, and delivering services autonomously. This economic model leverages technologies such as the Internet of Things (IoT), Artificial Intelligence (AI), and blockchain, enabling devices and systems to communicate and transact without human oversight. In this landscape, real-world machines will continuously generate value, creating a new category of dynamic real-world assets (RWAs).
peaq’s Innovations and Focus Areas
Recently, peaq introduced the world’s first tokenized robo farm in Hong Kong, along with its Web3 and Robotics software development kit (SDK). The partnership with VARA will prioritize several key areas: establishing a Machine Economy Free Zone (MEFZ) that VARA will endorse, creating a regulatory sandbox and infrastructure hub for the Machine Economy in the UAE, and facilitating targeted discussions with Dubai’s decision-makers to support this initiative on a case-by-case basis.
Support for Regulatory Frameworks
In this collaboration, peaq will supply VARA with data pertinent to the MEFZ, offer regulatory recommendations for the Machine Economy, and identify critical challenges hindering industry development. Leonard Dorlöchter, co-founder of peaq, emphasized the UAE’s position as a global leader in Web3 and robotics innovation, asserting that the country is poised to set global standards for machine tokenization. He described the MOU as a significant step toward future collaborations that will benefit the entire Machine Economy.
Joint Initiatives and Educational Collaboration
The MOU also includes provisions for regulatory guidance, where both parties will assist projects utilizing peaq technology that seek to obtain licenses from VARA. Joint events will be organized to aid applicants, covering both Machine Economy topics and general compliance. Furthermore, peaq will facilitate connections between potential applicants and VARA. The partnership will also focus on educational efforts, emphasizing both technical knowledge and compliance for participants in the Machine Economy sector.
Supporting Machine Economy Developers in Dubai
According to the press release, this initiative marks a significant development for Machine Economy builders looking to launch compliant operations in Dubai. It enhances VARA’s regulatory capacity by providing data insights and builder feedback, positioning Dubai as a premier destination for projects involving robotics, DePIN, and tokenized real-world assets. VARA CEO Mathew White highlighted Dubai’s commitment to fostering a Machine Economy as part of its ambitions for a digital economy, stating that this MOU lays the foundation for regulatory clarity in areas like on-chain robotics and tokenized machines. He believes that blending innovation with responsible oversight will establish Dubai as a benchmark for the secure and sustainable growth of this emerging asset class.
Market Potential for DePIN
The market capitalization for DePIN exceeded $50 billion in 2024 and is expected to soar to approximately $3.5 trillion by 2028. This rapid growth underscores the significant potential of the sector and highlights the importance of the collaborative efforts between peaq and VARA to shape a robust regulatory landscape. If you’re interested in staying updated on these developments, consider subscribing to our newsletter for the latest information.
