The UAE's Financial Services Authority will work with Dubai's Virtual Asset Regulatory Authority to streamline Dubai-based crypto businesses' entry into operating nationwide.
The United Arab Emirates will now allow virtual asset service providers (VASPs) operating in Dubai to extend their services to the entirety of the nation. With that, the country aims to bring regulatory cohesion to its burgeoning crypto scene, allowing crypto businesses registered in one of its leading emirates to streamline their entry into other emirates.
Dubai's digital asset regulator, the Virtual Asset Regulatory Authority (VARA), will work in tandem with the UAE's Financial Services Authority (FSA) -- the Gulf nation's top financial regulatory hierarchy, to mutually supervise VASPs in the country. An announcement from the regulators clarified how this system would work.
"The two parties agreed that VASPs operating in/from Dubai, or wishing to service the emirate of Dubai require to obtain a license from VARA, and can be registered by default with the SCA to service the wider UAE." This agreement will also ensure mutual oversight over matters relating to "penalty and fine imposition, the exchange of information and statistics, as well as cooperation in employee training and qualification." While that covers VASPs operating out of Dubai, those operating out of the other emirates and wishing to expand their services to the rest of the UAE must still obtain licensing from the SCA.
Regarding the cooperative approach, His Excellency Mohamed Ali Al Shorafa mentioned, "Today marks a pivotal milestone, demonstrating regulatory cohesion across the UAE, driving forward our shared vision for a robust, secure and interoperable virtual assets ecosystem." He added, "The strength of our collaboration with federal partners like SCA, allows for seamless and efficient passportability of regulated services, while assuring uncompromised market risk assurance across the UAE."
The UAE's approach to legitimizing crypto and making it easy for businesses to operate in the nation makes it one of the leading geographies for digital asset adoption. A recent study conducted by financial consultancy group Henley & Partners placed the UAE in third place for global crypto adoption.