Dubai is taking proactive steps to regulate the burgeoning machine economy by collaborating with peaq, a decentralized physical infrastructure (DePIN) protocol. This initiative aims to establish a clear regulatory framework for on-chain robotics and tokenized machines within the emirate.

The Virtual Assets Regulatory Authority (VARA) in Dubai has signed a memorandum of understanding (MoU) with peaq to develop this regulatory environment. The MoU signifies a commitment from both entities to enable participation, construction, and benefits from this novel economic sector in a compliant manner. The agreement was formalized at GITEX GLOBAL 2025 in Dubai.

A key aspect of this collaboration is the recognition and support of peaq's Machine Economy Free Zone (MEFZ) by VARA. Launched in July 2025, the MEFZ serves as a controlled environment for testing the integration of robotics and artificial intelligence (AI) within decentralized networks. This free zone is designed as a sandbox, fostering regulation, deployment, investment, and innovation. Initiatives within the MEFZ include machine tokenization, allowing investment in smart infrastructure via digital tokens, and a pilot program for Universal Basic Ownership (UBO), exploring the distribution of machine-generated wealth to individuals and communities affected by job automation.

The collaboration between VARA and peaq will focus on several key areas:

• Regulatory Guidance: Providing guidance to projects building on peaq that are seeking VARA licenses.
• Data Sharing: Exchanging data to support research and the development of appropriate regulations for the machine economy. Peaq will provide data and insights to help VARA understand the industry's needs.
• Talent Development: Jointly creating training initiatives in technology and compliance to foster a skilled workforce in the field.
• Free Zone Support: Supporting the growth and development of the Machine Economy Free Zone. VARA will assist projects in connecting with Dubai officials to get necessary approvals.

This partnership emphasizes the increasing role of real-world machines as active participants in the economy through blockchain technology. Peaq has recently launched a tokenized robo-farm in Hong Kong and introduced a Web3 and Robotics software development kit (SDK) to help developers create applications connecting machines to the blockchain.

Matthew White, CEO of VARA, stated that Dubai is committed to shaping the future of the digital economy by embracing emerging frontiers like the Machine Economy. He added that the MoU with peaq lays the groundwork for regulatory clarity in areas like on-chain robotics, DePIN, and tokenized machines, aiming to position Dubai as a global benchmark for the safe and sustainable growth of this next-generation asset class.

Leonard Dorlöchter, co-founder of peaq, highlights the UAE as a leading hub for innovation in Web3 and applied robotics. Peaq's mission is to provide the digital infrastructure for increasingly intelligent machines to serve humanity in the era of AI and automation.

The UAE's proactive approach to digital assets and blockchain innovation has been evident since the establishment of VARA in March 2022. The agency has played a crucial role in transforming Dubai into a leading hub for digital assets. VARA has also updated its rulebook for virtual asset service providers, clarifying the issuance and distribution of real-world assets (RWAs) and formed a strategic partnership with the Securities and Commodities Authority to synchronize their regulatory approach to digital assets across the UAE.

This collaboration between Dubai and peaq signifies a significant step towards regulating the machine economy, fostering innovation, and establishing Dubai as a global leader in the field.