The United Arab Emirates has established a formal agreement aimed at enhancing collaboration between its primary regulatory bodies overseeing cryptocurrency. The Securities and Commodities Authority (SCA) and the Dubai Virtual Assets Regulatory Authority (VARA) have committed to streamlining the nation’s virtual asset regulations.
In Dubai, there is a structured, multi-layered approach to cryptocurrency regulation. The Dubai Financial Services Authority (DFSA) provides an Innovation Testing Licence, which allows companies to conduct business under specific conditions prior to receiving full regulatory approval. Both DFSA and VARA implement a tiered licensing system, ensuring that the level of oversight is commensurate with the type of business activities being conducted.
The new arrangement facilitates shared processes for licensing, registration, and supervision of Virtual Asset Service Providers (VASPs). It outlines protocols for immediate data sharing, coordination to combat money laundering, and unified oversight across licensed entities. Licenses issued by Dubai will now be applicable throughout the United Arab Emirates after obtaining case-by-case consent. However, businesses will still need to complete compliance checks according to the regulations of each jurisdiction before commencing operations in new areas.
This development follows a joint declaration made in September 2023, which signaled intent from both regulatory bodies to align their operational frameworks. The current agreement takes that intention a step further by instituting formalized cooperation mechanisms.
In addition, the SCA has announced the formation of a Legislative Review Committee, which will collaborate with VARA to reassess and update the UAE’s cryptocurrency laws. This committee’s objective is to ensure local regulations remain consistent with international standards, thereby fostering a more robust regulatory environment for digital assets.
Furthermore, VARA has indicated ongoing discussions with other regulatory authorities within the UAE, such as the Abu Dhabi Global Market. These discussions aim to enhance coordination and ensure consistency in overseeing digital asset operations across the nation.
Overall, these efforts signify a commitment by the UAE to develop a comprehensive regulatory framework for virtual assets that enhances clarity, promotes transparency, and supports innovation in the cryptocurrency sector.