UAE Moves Towards Virtual Asset Regulation as SCA and VARA Sign Groundbreaking Agreement

In a significant development for the UAE's digital economy, the Securities and Commodities Authority (SCA) and Dubai’s Virtual Assets Regulatory Authority (VARA) have signed an agreement to establish a unified regulatory framework for virtual assets nationwide.

 

The agreement introduces a harmonised structure for licensing, supervision, and legislative coordination across the country -- representing a major step towards creating a cohesive regulatory environment for digital assets. The aim is to eliminate duplication and promote consistency in rules and oversight across all emirates.

 

One Framework, One Market

The agreement, reached after extensive collaboration, outlines a joint mechanism for licensing and supervising Virtual Asset Service Providers (VASPs) throughout the UAE. It includes reciprocal recognition of VASP licences issued by either VARA or the SCA, alongside coordinated processes for reviewing applications and monitoring compliance. The two regulators have also agreed to real-time information sharing and coordinated efforts in inspections, supervision and enforcement.

 

Emphasis on Legislative Alignment

To further reinforce this unified approach, the SCA’s Board of Directors has established a Coordinating Committee for Legislative Review, chaired by the SCA. The committee will work alongside VARA to revise existing laws and draft new legislation in line with global standards, including those set by the Financial Action Task Force (FATF).

 

This cooperation seeks to ensure that the UAE’s legal framework for virtual assets remains robust, adaptable, and internationally competitive amid the sector’s rapid growth.

 

Through joint efforts, the SCA and VARA aim to close regulatory gaps and prevent overlap that could impact both investors and businesses. The partnership will also enable unified risk assessments in key areas such as anti-money laundering (AML) and counter-terrorism financing (CTF). The coordinated framework will be supported by joint task forces, frequent consultations, and a shared digital infrastructure to streamline regulatory procedures.

 

Implications for the Industry

For stakeholders in the UAE’s crypto and digital asset ecosystem, this agreement brings:

 

• A clearer, more streamlined licensing process

• Consistent rules across jurisdictions

• Quicker regulatory decision-making

• Enhanced transparency and oversight

 

The move is expected to foster responsible innovation, strengthen investor protection, and enhance confidence in the UAE’s evolving virtual asset landscape. 

 

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