Virtual Assets Regulators in the UAE

Virtual Assets Regulators in the UAE

- Jim Swallow

Virtual Assets Regulators in the UAE

The United Arab Emirates (UAE) has seen the new investment opportunities that arise from Virtual Assets (VA) and is capitalising on the emerging digital space to facilitate foreign direct investment into the UAE economy. Virtual Assets regulators were first launched in March 2022 and have seen rapid development in the last two years at the local and federal levels.

The Virtual Assets industry including Bitcoin, Crypto, and Blockchain can no longer be ignored as demand continues to surge. Dubai and Abu Dhabi have joined many other world leaders in the virtual assets space by creating regulatory authorities in which to develop and grow the virtual assets markets in the UAE.

Virtual Assets regulations were released in 2023 which outline plans to monitor the responsible growth of Virtual Assets in the Emirates and address plans to minimise risks and prevent Money Laundering (ML) and Terrorist Financing (TF).

As a regulated activity, VA requires approval from one of the main Virtual Assets Service Providers (VASP) in the UAE.

Dubai VASPs

The Securities and Commodities Authority (SCA) operates at a federal level for mainland UAE. For the Emirate of Dubai, virtual assets activities are regulated through the Virtual Assets Regulation Authority (VARA).

Licensing requests for virtual assets in Dubai inspired the formation of the Virtual Assets Regulation Authority (VARA) in March 2022, making it the world’s first independent regulator. VARA has created the regulatory framework for VA, designed to protect investors and apply the highest international standards for companies doing business in the virtual assets industry in Dubai.

VASP licenses with VARA approval in Dubai can be obtained in the Dubai World Trade Centre (DWTC), Dubai Multi Commodities Centre (DMCC) and the International Free Zone Authority (IFZA).

The Dubai International Financial Centre (DIFC) also has its separate regulator for virtual assets known as the Dubai Financial Services Authority (DFSA). Although DIFC has virtual assets regulations in place, by comparison to VARA, DIFC has yet to have registered any VASPs.

Abu Dhabi VASPs

In Abu Dhabi, the Financial Services Authority (FSA) is the regulator within the Abu Dhabi Global Market (ADGM). Companies can obtain VA licensing through registration of an operational ADGM free zone company.

Growth of Virtual Assets in the UAE

The growth of the virtual assets industry is substantial. The Crypto market in the UAE is projected to grow by 7.9% resulting in a market volume of US$395.8m by 2028.

On record, VARA has awarded 20 regulated VASP licenses within Dubai. With key industry players now operational in the UAE such as Binance. Requiring businesses to obtain a specific VA license allows the UAE to oversee and maintain standards for engagement.

Digital currencies are emerging as some of the most in-demand assets for investors. Individuals and businesses are looking to benefit from the success of virtual assets. Robust regulations and frameworks are important to minimise the misuse of virtual assets and rapidly developing technologies.

The UAE Digital Strategy

The UAE’s strategy is to leverage emerging technologies and digital innovation to create a hub for Blockchain, Crypto and most recently, AI industries to thrive.

Incubators such as Abu Dhabi’s Hub71 digital assets programme and Ras Al Khaimah (RAK) Digital Assets Oasis highlight just some of the many initiatives and cash/in-kind incentives to facilitate digital transformation and Web3 growth in the UAE.

Introducing virtual assets regulation and incubation programmes only cements the UAE’s future position to foster growth in digital finance and web3 initiatives. The UAE’s Central Bank successfully transferred fifty million digital dirhams to China, it’s first cross-border transaction further showing the incremental steps that the UAE is making at the forefront of the digital currency’s movement.

How can we assist?

PPG has successfully assisted clients with setting up a Virtual Assets companies in the UAE within Abu Dhabi’s ADGM and Dubai with VARA approval. Our onshore team led by Zana Jablan Musa of Sovereign Corporate Services will guide you through the regulated document, risk and compliance requirements. We can advise you on the correct virtual asset business activities per your company's requirements.

For assistance with setting up a virtual assets company in Dubai or Abu Dhabi, please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at or complete the contact form below and we will be delighted to assist you.

Set up a Virtual Assets company in the UAE

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