The United Arab Emirates (UAE) is making significant strides in the realm of cryptocurrency regulation in 2025. A notable development is the formal partnership between the Securities and Commodities Authority (SCA) and the Dubai Virtual Assets Regulatory Authority (VARA), aimed at unifying the regulatory landscape for virtual assets across the nation. This collaboration, announced recently, builds on prior discussions held in September 2024, where both regulators expressed their commitment to harmonizing crypto frameworks within the UAE.
The primary objective of this partnership is to provide a cohesive regulatory framework that facilitates the operation of Virtual Asset Service Providers (VASPs) throughout the UAE. According to a spokesperson from VARA, while the agreement allows for mutual license recognition, it does not equate to automatic passporting of licenses across different emirates. The spokesperson emphasized that the partnership operationalizes their earlier Memorandum of Understanding (MOU) from 2024, laying the groundwork for a more structured regulatory environment.
“Licensing reciprocity is a key feature of the partnership, but not automatic passporting,” the VARA spokesperson stated.
This framework will enable a VASP licensed in one jurisdiction to be recognized by the other, albeit with the requirement of adhering to specific coordination protocols and regulatory checks. These measures include assessments related to Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT), as well as ensuring operational readiness and supervisory alignment. Such steps are crucial for maintaining robust national security and compliance standards.
For VASPs looking to establish or expand their operations within the UAE, this partnership promises enhanced regulatory clarity and efficiency. The spokesperson noted that it minimizes the complexities associated with navigating “separate, potentially conflicting” approval processes, thereby reducing operational risks and expediting market entry. This initiative not only streamlines the regulatory process but also enhances the UAE’s attractiveness as a global hub for innovation in the cryptocurrency sector.
The new mechanisms introduced as part of this partnership include:
- A unified VASP registration framework
- Mutual license recognition
- Real-time data sharing
- Joint supervision protocols
- Cross-jurisdictional AML coordination
- The establishment of a Legislative Review Committee
The formation of the Legislative Review Committee is particularly noteworthy, as it is tasked with evaluating and refining the UAE’s crypto regulations in line with international best practices. This commitment from both the SCA and VARA underscores their dedication to fostering a competitive regulatory environment that can keep pace with the evolving digital economy.
VARA CEO Matthew White described the partnership as “a pivotal moment” in the journey to future-proof the UAE’s digital economy.
Similarly, SCA CEO Waleed Al Awadhi highlighted the importance of transparency and trust in attracting investment to the sector. While this agreement marks a significant bilateral advance between SCA and VARA, it is also part of a broader initiative to enhance regulatory coordination at the national level. Ongoing dialogues are in place with other regulatory bodies, including the Abu Dhabi Global Markets (ADGM), to further promote interoperability and cross-border cooperation.
As the UAE continues to develop a unified approach to virtual asset oversight, the focus remains on future collaborations, which are seen as a strategic priority for enhancing the region’s regulatory framework.
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