UAE SCA and VARA Unify Crypto Regulation with Shared Licensing Framework

The United Arab Emirates has taken a significant step toward harmonizing its regulatory approach to virtual assets, as the federal Securities and Commodities Authority (SCA) and Dubai’s Virtual Assets Regulatory Authority (VARA) have entered into a formal agreement to establish a unified framework for the sector. The initiative aims to create a consistent and efficient regulatory environment across all emirates, fostering a more transparent and investor-friendly market [1][2].

Under the new arrangement, both entities have agreed to implement a shared licensing system that allows crypto firms to operate nationwide with a single license issued by either the SCA or VARA. This mutual recognition eliminates the need for businesses to seek separate approvals in different jurisdictions, thereby reducing administrative complexity and encouraging broader participation in the market [3][4]. The agreement also includes provisions for joint compliance monitoring to ensure that regulations are uniformly enforced across the country [5].

A key component of the partnership is the real-time exchange of data between the two regulators. This facilitates coordinated inspections and synchronized enforcement actions, improving the overall efficiency of oversight. To support this, the SCA has established a Coordinating Committee for Legislative Review, which will work with VARA to evaluate current laws and propose necessary updates that align with international standards, including those set by the Financial Action Task Force (FATF) [6]. The committee’s focus will also include addressing gaps in existing rules, particularly in the areas of anti-money laundering (AML) and counter-terrorism financing (CTF) [7].

The unified regulatory approach is expected to enhance the UAE’s competitiveness as a global center for digital finance. By creating a more predictable and streamlined environment, the country aims to attract international investment and support innovation in fintech and blockchain technologies. Industry experts suggest that the reduced jurisdictional ambiguity could encourage more businesses to enter the market, particularly those seeking to operate across multiple emirates without duplicating compliance efforts [8].

The move also aligns with broader national goals, such as the UAE Vision 2021 and Centennial 2031, which emphasize economic diversification and technological advancement. As the UAE continues to strengthen its regulatory infrastructure, it may also influence regional discussions on virtual asset governance, potentially setting a precedent for neighboring jurisdictions [9].

Source:

[1] Cointelegraph. SCA and VARA Formalize Partnership to Unify UAE Crypto. https://cointelegraph.com/news/uae-sca-vara-crypto-regulatory-partnership

[2] Coin Edition. UAE Unifies Crypto Regulation Under New SCA-VARA. https://coinedition.com/uae-crypto-sca-vara-agree-to-unified-licensing-framework/

[3] Gulf News. Major move: SCA, VARA agree on unified framework to regulate virtual assets in UAE. https://gulfnews.com/your-money/cryptocurrency/major-move-sca-vara-agree-on-unified-framework-to-regulate-virtual-assets-in-uae-1.500225024

[4] UNLOCK. UAE SCA and VARA Launch Unified Virtual Asset. https://www.unlock-bc.com/146760/uae-aligns-crypto-regulations-as-sca-and-vara-launch-unified-virtual-asset-framework/

[5] MEXC. UAE SCA and Dubai VARA reach crypto regulatory cooperation to promote mutual recognition of licenses. https://www.mexc.com/news/uae-sca-and-dubai-vara-reach-crypto-regulatory-cooperation-to-promote-mutual-recognition-of-licenses/64095

[6] eblockmedia.com. UAE Teams Up with Dubai to Integrate Digital Asset Regulation. https://www.eblockmedia.com/news/articleView.html?idxno=25499

[7] MSN. Major move: SCA, VARA agree on unified framework to regulate virtual assets in UAE. https://www.msn.com/en-gb/money/other/major-move-sca-vara-agree-on-unified-framework-to-regulate-virtual-assets-in-uae/ar-AA1K22eA