Unified framework agreed for virtual asset regulation in UAE
The UAE’s Securities and Commodities Authority (SCA) and the Dubai Virtual Assets Regulatory Authority (VARA) signed a strategic partnership in August to align regulatory frameworks for virtual assets across the country.
The agreement, which aims to eliminate duplication and strengthen supervision, sets out a unified mechanism for registering virtual asset service providers (VASPs), enabling mutual recognition of licences and facilitating the exchange of information between the two regulators. It also introduces joint oversight and operational coordination.
The move comes after months of coordination between the two authorities and reflects broader efforts by the UAE to build a streamlined, globally credible regulatory environment for digital assets.
Joint legislative review and policy alignment
Alongside the agreement, the SCA Board approved the creation of a Coordinating Committee for Legislative Review, which is to be chaired by the SCA. This committee will work closely with VARA to review draft laws and regulatory updates in the virtual asset space, ensuring they are consistent with international standards and relevant to the UAE market.
This approach is designed to ensure a legislative framework that can adapt to industry changes without losing sight of investor protection or financial system stability. Both authorities said it will be an ongoing process, supported by shared systems, joint supervisory work and coordinated enforcement where necessary.
Strengthening the UAE’s global position
Virtual asset oversight has been identified as a priority within the UAE’s broader economic and financial strategy. The country is looking to establish itself as a centre for blockchain development, tokenised products and digital asset markets, and the SCA-VARA partnership is intended to provide greater clarity and give confidence to both domestic and international market participants.
By presenting a coordinated position and aligning their supervisory models, the two regulators are also signalling that the UAE intends to maintain full alignment with the expectations of bodies such as the Financial Action Task Force (FATF), the global anti-money laundering and countering the financing of terrorism watchdog.
Implications for virtual asset service providers
For VASPs, a single registration route should mean less administrative complexity, especially for firms active across more than one Emirate. However, they will still be required to comply with each authority’s operational, governance and technical requirements, as well as to meet all applicable anti-money laundering and counter-terrorist financing obligations.
The new arrangement also makes it clear that the SCA and VARA will be coordinating their monitoring, inspection and enforcement activities more closely. Firms that work across both jurisdictions should take time now to confirm that their licences, internal procedures and reporting processes are ready for this more integrated approach.
Next steps for implementation
The shift will involve aligning application procedures, standardising supervisory methods and linking up data-sharing systems. Both regulators confirmed that the rollout will take place in phases, with additional instructions to be issued to the market as these changes are introduced.
The UAE will also keep engaging with overseas regulators and global standard-setting organisations to ensure that its framework can operate effectively across borders. This includes its continued involvement with FATF and regional working groups so that domestic rules keep pace with developments in other jurisdictions.
Sovereign insight
The SCA-VARA agreement is a notable development for the UAE’s digital asset sector that offers greater regulatory clarity and a more streamlined route to compliance. For companies already licensed, as well as those exploring market entry, the unified approach should reduce procedural repetition and improve certainty when planning operations.
Sovereign PPG advises virtual asset businesses and investors on structuring, licensing and compliance in the UAE. Taking the time to choose the right legal structure, managing filings accurately and anticipating where approval steps may vary between Emirates can be critical to long-term success, particularly for foreign-owned or specialist sector businesses.
To discuss your UAE virtual asset strategy, or to explore opportunities in other GCC markets, contact Sovereign PPG at sovppg@SovereignGroup.com, call +971 (0)4 456 1761 (Dubai) or +971 (0)2 448 5120 (Abu Dhabi), or complete the enquiry form below.
