Dubai and UAE move to align crypto frameworks under new partnership

Crypto Insight

6 days ago

The United Arab Emirates (UAE) took a significant step toward harmonizing its approach to crypto regulation. The country's Securities and Commodities Authority (SCA) and the Dubai Virtual Assets Regulatory Authority (VARA) announced a strategic partnership to unify the UAE's approach to crypto regulations.
Last September, the regulators expressed their intention to work together toward unifying crypto frameworks in the country. One feature of the partnership is that it will allow Dubai-based licenses to service the entire UAE, according to a Wednesday announcement shared with Cointelegraph.
A VARA spokesperson told Cointelegraph that the latest development formalizes the agreement between the two regulators and 'operationalises that intent' with concrete mechanisms.
'In essence, the 2024 MOU was a starting point. The current partnership is its formal and functional implementation,' VARA said. Licensing reciprocity, not automatic passporting
While the agreement establishes a mechanism for mutual recognition of licenses between SCA and VARA, it will not offer automatic 'passporting' of licenses across jurisdictions.
'Licensing reciprocity is a key feature of the partnership, but not automatic passporting,' the spokesperson said.
The spokesperson clarified that the agreement establishes a mutual recognition mechanism between the SCA and VARA.
This means that a VASP licensed by one authority can be recognized by the other. However, they will be subject to coordination protocols and applicable regulatory checks.
'This includes AML/CFT assessments, operational readiness, and supervisory alignment, ensuring that national security and compliance standards remain robust,' the spokesperson told Cointelegraph.
For VASPs operating and wanting to operate in the UAE, the partnership provides regulatory clarity, reduced duplication and a streamlined route to national coverage.
The VARA spokesperson said this eliminates the need to navigate 'separate, potentially conflicting' approval processes, which 'lowers operational risk and improves speed to market.'
'It also strengthens the UAE's global appeal as a credible, innovation-first jurisdiction with a unified approach to virtual asset oversight,' the spokesperson added. SCA forms committee to refine regulations
The mechanisms include a unified virtual asset service provider (VASP) registration framework, mutual license recognition, real-time data sharing and joint supervision protocols, cross-jurisdictional Anti-Money Laundering (AML) coordination and the formation of a Legislative Review Committee.
The SCA approved the formation of the committee, which is mandated to work with VARA to evaluate and refine crypto regulations in the country in line with international best practices. This signals commitment from both parties to build a globally competitive regulatory environment.
Officials from both regulators described the partnership as a major step in positioning the UAE as a leader in crypto governance.
VARA CEO Matthew White called the partnership 'a pivotal moment' in the journey to future-proof the UAE's digital economy. At the same time, SCA CEO Waleed Al Awadhi said transparency and trust are central to attracting investment.
A broader effort to enhance regulatory coordination
While the recent development is a bilateral agreement between the SCA and VARA, the spokesperson told Cointelegraph that it's part of a broader UAE effort to enhance national-level regulatory coordination.
VARA said that there's an ongoing dialogue between other regulators, including the Abu Dhabi Global Markets (ADGM) and local and international stakeholders to promote interoperability, supervisory consistency and cross-border cooperation.
'Future collaborations remain a strategic priority,' the spokesperson added.
Source: https://cointelegraph.com/news/uae-sca-vara-crypto-regulatory-partnership