Dubai has adopted its first law to regulate the crypto sector and set up a dedicated regulator to oversee virtual asset activities and service providers.
Landmark Legislation: Virtual Assets Law Approved
Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, announced the approval of the first virtual assets law for Dubai. The law establishes a comprehensive regulatory framework for cryptocurrencies and virtual assets, along with the Dubai Virtual Assets Regulatory Authority (VARA) to oversee crypto activities and regulate service providers.
Sheikh Mohammed stated: "The goal is to establish the UAE and Dubai's position as a key player in designing the future of virtual assets globally." He noted that this law is the first of its kind globally, designed to create the best business environment in terms of regulation, licensing, and governance.
VARA's Mandate and Regulatory Scope
According to the announcement, VARA is tasked with overseeing the trading and issuance of virtual assets and tokens, as well as authorizing and regulating virtual asset service providers (VASPs). The authority must ensure the highest standards of protection for beneficiaries' personal data and monitor transactions to prevent price manipulation. Crypto trading platforms offering exchanges between cryptocurrencies and fiat currencies, or between cryptocurrencies, are subject to VARA authorization. Companies providing crypto transfer, custody, and management services are also regulated under the new law.
The law applies throughout Dubai except for the Dubai International Financial Centre (DIFC) free zone. The DIFC's regulator, the Dubai Financial Services Authority (DFSA), is developing its own cryptocurrency regulation.
UAE's Broader Regulatory Push
The UAE has been advancing crypto regulations to attract new businesses. The Securities and Commodities Authority (SCA) previously indicated that the UAE is close to launching its own regulatory framework for crypto assets. Dubai's move further solidifies the country's position as a global hub for digital assets, offering clearer legal certainty for crypto enterprises and enhanced investor protection.