Virtual Asset Regulators in the UAE: A Comparison of Different Licensing Frameworks | White & Case LLP

In recent years, regulators in the United Arab Emirates ( United Arab Emirates) is committed to creating an environment for the sustainable development of the virtual asset industry in the UAE through a number of regulatory measures enacted at the local and federal levels. Firms seeking to provide virtual asset services to or from the UAE will need to navigate a complex regulatory environment that includes multiple regulators with varying scopes depending on the proposed activities and the geographic target of such services .

Currently, the UAE has five main regulatory frameworks governing the provision of virtual asset services, including: (i) Federal Regulations promulgated under Cabinet Resolution No. 111 on Virtual Assets; (ii) the two financial free zones in the Dubai International Financial Center Regulations issued within (Dubai International Financial Center) and Abu Dhabi Global Market (ADGM); (iii) regulations applicable within the Emirate of Dubai (excluding DIFC) under the purview of the recently established Dubai Virtual Assets Regulatory Authority (yes); (iv) Crypto Business Licensing Framework Applicable to Dubai Multi Commodity Center Free Zone (DMCC).

We have prepared the table below outlining the key features of each of the major virtual asset licensing frameworks in the UAE.

epilogue

The UAE’s various virtual asset licensing frameworks demonstrate the country’s commitment to fostering an innovative and robust regulatory environment for the provision of virtual asset services. While the virtual asset industry in the UAE is still relatively new, UAE regulators have been proactive in implementing measures aimed at protecting investors and minimizing financial crime, while encouraging the sustainability and growth of the industry. As the industry continues to develop, we can expect more regulatory and policy measures from relevant departments to adapt to new challenges and opportunities facing the industry. Given the nascent nature of virtual asset regulations, it remains difficult to provide estimated timelines for the completion of virtual asset license applications, as these will depend on the complexity of the relevant application and the scope of the proposed activity. Service providers should seek regulatory advice before commencing virtual asset-related activities in the UAE.