TLDR
- VARA and SCA form partnership to unify crypto regulation across UAE.
The partnership allows for mutual license recognition between regulators.
New crypto framework reduces duplication and ensures national coverage.
UAE regulators aim for global competitiveness and regulatory clarity.
The United Arab Emirates (UAE) is taking an important step toward creating a unified approach to virtual asset regulations. The Securities and Commodities Authority (SCA) and the Dubai Virtual Assets Regulatory Authority (VARA) have entered into a strategic partnership aimed at harmonizing crypto regulations across the country. This move is a significant development for the UAE’s crypto market as it seeks to enhance clarity, reduce regulatory complexity, and position itself as a global leader in crypto governance.
The partnership builds on discussions that began in September of the previous year, when the two regulators expressed their intention to work together on aligning the regulatory frameworks for virtual assets. The new collaboration aims to streamline the process for virtual asset service providers (VASPs) operating in the country, creating a more efficient and unified system.
Licensing Reciprocity and Its Impact on the Crypto Market
One of the key features of the new agreement between VARA and SCA is the mutual recognition of licenses between the two bodies. Under this framework, VASPs licensed by either authority will be recognized by the other, providing clearer paths for businesses to operate across the UAE. However, it is important to note that the agreement does not automatically allow for “passporting” of licenses between emirates.
A VARA spokesperson emphasized that while the partnership facilitates mutual recognition, it does not mean that a license granted in one emirate automatically carries over to others. Instead, businesses will still need to follow specific coordination protocols and meet regulatory requirements, including anti-money laundering (AML) assessments, operational readiness checks, and supervisory alignment. This ensures that national security and compliance standards are maintained at a high level.
This development as a result is expected to reduce operational risks for businesses, enabling quicker market entry and minimizing duplication in the approval process. In turn, this could enhance the UAE’s attractiveness as a jurisdiction for crypto businesses and investors.
SCA Forms Committee to Refine Regulations
As part of this partnership, the SCA has approved the creation of a committee designed to refine and enhance crypto regulations in line with global best practices. The committee will work closely with VARA to evaluate and adjust current rules, ensuring that the UAE remains competitive on the global stage.
The committee’s focus will be on the ongoing development of the UAE’s crypto regulatory environment, promoting transparency and consistency. Officials from both VARA and SCA have expressed their commitment to building a system that can support the growth of the digital economy while ensuring that it remains secure and compliant with international standards.
“The formation of this committee marks a pivotal moment for crypto regulation in the UAE,” said VARA CEO Matthew White. The regulators have made it clear that they are committed to creating a robust and future-proof regulatory environment.
Expanding National-Level Regulatory Coordination
Although the VARA-SCA partnership is bilateral, it is part of a broader effort by the UAE to improve regulatory coordination on a national level. The two regulators have engaged in ongoing discussions with other entities, such as the Abu Dhabi Global Market (ADGM), to promote interoperability and supervisory consistency.
By fostering collaboration between local and international stakeholders, the UAE aims to ensure that its crypto regulations remain adaptable and in line with global standards. According to the VARA spokesperson, future collaborations with other regulatory bodies will be a strategic priority, ensuring that the UAE can continue to position itself as a leading hub for virtual assets.
This approach as a result reflects a long-term vision for the country’s digital economy, positioning it to handle both the challenges and opportunities presented by the rapidly evolving crypto industry. The focus on alignment and cooperation could ultimately benefit businesses looking for regulatory certainty and stability in a growing market.
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