The Securities and Commodities Authority (SCA) and the Dubai Virtual Assets Regulatory Authority (VARA) announced a coordinated approach to the regulation of virtual assets (VAs) and their service providers in the UAE. The collaboration is designed to provide a coherent regulatory structure, giving market participants greater clarity while reinforcing the UAE’s commitment to financial innovation and its leadership in the digital economy.
The joint approach builds on two recent regulatory milestones: the Cabinet Resolution No. (111) of 2022, concerning the regulation of virtual assets, and a cooperation agreement signed between the two authorities on 5 September 2024. These frameworks established mechanisms for the licensing and oversight of virtual asset service providers (VASPs).
Aligned frameworks with clear jurisdictional boundaries
Under the coordinated approach, the SCA and VARA have aligned their regulatory frameworks while maintaining distinct jurisdictional mandates to provide clarity for the market.
The SCA’s mandate, under the 2022 cabinet resolution, covers the regulation, licensing, and supervision of VASP’s across the UAE.
VARA’s mandate, established by Dubai’s Law No. (4) of 2022, covers the regulation of all forms of virtual assets and their service providers within the Emirate of Dubai, excluding the Dubai International Financial Centre (DIFC). Its oversight spans the full lifecycle of virtual assets, from issuance and exchange to custody and trading, in adherence with international standards for market integrity and risk management.
The regulators stated that this collaborative approach will provide a clear structure for virtual assets in the UAE, giving issuers, brokers, custodians, and investors the regulatory certainty needed to innovate responsibly.
A global centre for responsible innovation
With more than 40 licensed VASPs now operating in Dubai, the UAE is positioning itself at the forefront of the global digital asset transformation.
H.E. Waleed Al Awadhi, chief executive officer of the SCA, stated: “Our collaboration with VARA underscores the UAE’s commitment to a secure, transparent, and innovation-friendly virtual assets environment. By clearly defining our respective regulatory mandates and aligning supervisory frameworks, we are enabling responsible growth of virtual assets and their service providers within a well-defined regulatory structure. This joint effort supports the UAE’s vision of a resilient, digitally advanced financial ecosystem and reinforces our leadership in shaping next-generation financial markets.”
Matthew White, chief executive officer of VARA, added: “This partnership between SCA and VARA provides much needed market assurance and certainty to further the convergence between traditional finance (TradFi) and virtual assets, positioning the UAE as a global centre for responsible innovation. Our shared objective remains to ensure that this borderless economy is matched by the strength of its regulatory foundations, operating at the nexus of clarity, accountability, and technological advancement. This level of regulatory collaboration has allowed VARA as a specialist regulator to house the largest regulated ecosystem for VASPs in the world.”
