UAE Regulators, VARA and SCA, Align to Strengthen Oversight of Virtual Assets

The Securities and Commodities Authority (SCA) and the Dubai Virtual Assets Regulatory Authority (VARA) have announced a coordinated framework for regulating virtual assets (VAs) and their service providers, marking a significant step toward unified governance of the UAE’s fast-growing digital asset sector.

This move builds on two key regulatory milestones: Cabinet Resolution No. (111) of 2022, which established the federal foundation for virtual asset regulation, and the Cooperation Agreement signed on September 5, 2024, between the SCA and VARA.

The agreement outlines mechanisms for licensing and oversight of virtual asset service providers (VASPs), ensuring regulatory coherence in line with the UAE’s “Principle of the 50” and the government’s vision for sustainable, innovation-driven growth.

Under the new alignment, both authorities will maintain distinct jurisdictional roles while providing greater clarity for market participants and promoting responsible adoption of digital assets.

The SCA will oversee the licensing and supervision of VASPs across the UAE under Cabinet Resolution No. (111) of 2022, ensuring national-level oversight and compliance. Meanwhile, VARA, established under Law No. (4) of 2022, will continue to regulate all virtual asset activities within the Emirate of Dubai (excluding DIFC), covering issuance, exchange, custody, and trading, in accordance with global standards of transparency, market integrity, and risk management.

Through this unified approach, the two regulators aim to provide a consistent and secure framework that supports innovation while protecting investors and maintaining financial stability.

H.E. Waleed Al Awadhi, CEO of the SCA, said, “Our collaboration with VARA underscores the UAE’s commitment to a secure, transparent, and innovation-friendly virtual assets environment. 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. This joint effort supports the UAE’s vision of a resilient, digitally advanced financial ecosystem and reinforces our leadership in shaping next-generation financial markets.”

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. This level of regulatory collaboration has allowed VARA as a specialist regulator to house the largest regulated ecosystem for VASPs in the world. Dubai and the wider UAE are setting a benchmark for how regulators can foster innovation while maintaining market integrity and public trust.”

With over 40 licensed VASPs operating in Dubai and a growing ecosystem that bridges traditional finance and digital assets, the UAE continues to be a global leader in regulatory innovation, offering a model for how collaboration between national and local authorities can drive progress while ensuring market confidence and investor protection.