SCA and VARA partner to strengthen virtual asset rules, oversight in UAE

Dubai: The Securities and Commodities Authority (SCA) and the Dubai Virtual Assets Regulatory Authority (VARA) have announced a joint approach to regulating Virtual Assets (VAs) and their service providers across the UAE. The collaboration aims to create a clear, unified framework that promotes innovation while protecting investors and ensuring market integrity.

The coordinated effort supports the UAE’s vision for financial inclusion, capital market innovation, and digital economy leadership, building on two key milestones — the Cabinet Resolution No. (111) of 2022 regulating virtual assets and service providers, and the Cooperation Agreement signed on September 5, 2024, which outlined mechanisms for joint licensing and oversight of virtual asset service providers (VASPs).

Clear mandates

Under the new structure, both authorities will maintain distinct yet complementary responsibilities:

• SCA’s Mandate: The SCA oversees the licensing and supervision of virtual asset service providers across the UAE, under Cabinet Resolution No. (111) of 2022.

• VARA’s Mandate: Under Law No. (4) of 2022, VARA regulates all virtual assets and asset-referenced tokens within the Emirate of Dubai (excluding DIFC). Its remit includes issuance, exchange, custody, and trading of digital assets, in line with international standards for transparency and risk management.

This alignment offers regulatory clarity to issuers, brokers, custodians, and investors, fostering responsible innovation while ensuring consumer protection and market stability.

Shared objective

Waleed Al Awadhi, CEO of the SCA, said: “By clearly defining our respective regulatory mandates and aligning supervisory frameworks, we are enabling responsible growth of virtual assets and their service providers within a well-defined regulatory structure.”

Matthew White, CEO of VARA, added: “This partnership between SCA and VARA provides much needed market assurance and certainty to further the convergence between traditional finance (TradFi) and virtual assets, positioning the UAE as a global centre for responsible innovation.

"Our shared objective remains to ensure that this borderless economy is matched by the strength of its regulatory foundations, operating at the nexus of clarity, accountability, and technological advancement.”

Global benchmark

With more than 40 licensed VASPs already operating in Dubai and a rapidly expanding ecosystem that bridges traditional finance and digital assets, the UAE is emerging as a global model for clear and forward-looking virtual asset regulation.

The joint framework between SCA and VARA establishes a foundation for responsible innovation, providing confidence to businesses and investors while reinforcing the UAE’s position as a world leader in financial technology and virtual asset governance.