UAE Strengthens Role as Virtual Assets Hub with Regulatory Collaboration

UAE has established a major regulatory collaboration in an effort to strengthen its position as a global center for virtual assets. In an effort to strengthen the nation’s virtual assets framework, the Securities and Commodities Authority (SCA) and the Virtual Assets Regulatory Authority (VARA) have inked a cooperation agreement. In order to guarantee a well-regulated industry, the agreement establishes cooperative oversight mechanisms and specifies licensing standards for Virtual Asset Service Providers (VASPs).

Collaborative Oversight of Virtual Assets

One significant step toward regulating virtual assets in the UAE is the collaboration agreement between the SCA and VARA. The agreement was signed by Matthew White, the CEO of VARA, and Maryam Buti Al Suwaidi, the CEO of the SCA. It requires that VASPs that want to operate in Dubai first get a license from VARA. If approved, the license enables VASPs to function throughout the United Arab Emirates, with the SCA overseeing operations beyond Dubai. This cooperative strategy guarantees information exchange and mutual oversight amongst the authorities, thereby augmenting the stability of the sector.

The agreement also addresses important aspects like penalties, training for employees, and the exchange of statistics. In alignment with anti-money laundering laws, both regulators are committed to fostering a safe and reliable virtual asset market. SCA chairman Mohamed Ali Al Shorafa remarked that the partnership will “bolster confidence in the UAE’s investment ecosystem” while ensuring compliance with critical regulations.

Helal Al Marri, chairman of VARA, called the partnership a significant milestone in UAE’s regulatory landscape. He emphasized the importance of a unified approach, stating that this collaboration “allows for seamless and efficient portability of regulated services.” The agreement ensures that the UAE remains a secure and attractive destination for virtual asset investments, further supporting the nation’s digital economy.

Under the agreement, both authorities will establish procedures for licensing and supervising VASPs, following UAE Cabinet decisions that regulate the virtual assets sector.