Virtual Asset Regulators in the UAE: A comparison of the different licensing frameworks

In recent years, regulators within the United Arab Emirates (the UAE) have worked to foster an environment for the sustainable growth of the UAE virtual asset sector through the enactment of several regulatory measures established at both a local and federal level. Companies seeking to provide virtual asset services to or from the UAE will need to navigate a complex regulatory landscape, consisting of several regulators with various regulatory remits depending on the proposed activities and the target geography for such services.

At present, there are five main regulatory frameworks within the UAE governing the provision of virtual asset services, comprising: (i) Federal regulations issued pursuant to Cabinet Resolution No. Law 111 on virtual assets; (ii) regulations issued within the two financial free zones of the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM); (iii) regulations applying onshore within the Emirate of Dubai (excluding the DIFC) within the remit of the recently established Dubai Virtual Assets Regulatory Authority (VARA); and (iv) the crypto business licensing framework applicable within the Dubai Multi Commodities Centre free zone (DMCC).

We have prepared the below comparison table, outlining the main features of each of the key virtual asset licensing frameworks within the UAE.

View full image: Virtual Asset Regulators (PDF)

Concluding Thoughts

The various virtual asset licensing frameworks within the UAE demonstrate the country's commitment to fostering an innovative yet robust regulatory environment for the provision of virtual asset services. While the virtual asset industry within the UAE remains relatively new, the UAE regulators have been proactive in implementing measures designed to protect investors, minimise financial crime, whilst encouraging the sustainability and growth of the industry. As the industry continues to evolve, we can expect additional regulatory and policy measures introduced by the relevant authorities to adapt to new challenges and opportunities facing the industry. Given the nascent nature of virtual asset regulations, it remains difficult to provide estimated timelines for completion of a virtual assets licensing application as these would be determined by the complexity of the relevant application and the scope of proposed activities. Service providers should seek regulatory advice before commencing activities relating to virtual assets in the UAE.

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