UAE Financial Regulators to Unify Regulation of Digital Asset Sector

In the United Arab Emirates, Dubai’s Virtual Assets Regulatory Authority (VARA) and the UAE’s Securities and Commodities Authority (SCA) agreed to jointly supervise virtual asset service providers (VASP).

Dubai’s Virtual Assets Regulatory Authority (VARA) and the UAE’s Securities and Commodities Authority (SCA) signed a cooperation agreement to implement a unified licensing regime for virtual asset service providers (VASPs). 

This approach will allow the financial regulators to unify the regulatory framework for the digital asset sector in the UAE. Specifically, the collaboration will enable VASPs licensed by the VARA to provide services to operate throughout the country. VASPs will need to obtain a license from the SCA to work in emirates other than Dubai, but the process will be greatly simplified for the VARA license holders.

As part of the agreement, VASP oversight and the imposition of fines will be handled jointly by both regulators. The VARA and the SCA also agreed to share information and train each other’s staff, improving regulatory coordination in the country.

According to Helal Saeed Al Marri, the VARA’s Chair, the cooperation with the SCA will enhance local business opportunities and contribute to the sustainable development of the digital asset industry not only regionally but globally. Mohamed Ali Al Shorafa, the SCA’s Chair, added that the primary objective of the agreement is to develop the digital asset industry in the UAE and to comply with AML legislation.

The UAE authorities aim to create a favorable environment for cryptocurrencies in the region, making the country the most crypto-friendly in the Middle East. The UAE residents can access digital assets through state-owned banks , commercial institutions , cryptocurrency exchanges , and many other companies acting as VASPs, whose work is clearly regulated by local legislation.