Dubai and UAE move to align crypto frameworks under new partnership

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Licensing Reciprocity, Not Automatic Passporting SCA Establishes Committee for Regulatory Refinement Part of Broader Regulatory Enhancement Efforts Licensing reciprocity, not automatic passporting SCA forms committee to refine regulations

Dubai, United Arab Emirates – The United Arab Emirates (UAE) took a significant step toward harmonizing its approach to crypto regulation, with the country’s Securities and Commodities Authority (SCA) and the Dubai Virtual Assets Regulatory Authority (VARA) announcing a strategic partnership to unify the UAE’s virtual asset regulatory framework.

Announced Wednesday and shared with Cointelegraph, the collaboration aims to formalize the intent previously expressed last September. A key feature is allowing Dubai-based licenses to service the entire UAE market.

Speaking to Cointelegraph, a VARA spokesperson described the move as formalizing the 2024 Memorandum of Understanding (MOU) between the two regulators, turning their shared intent into concrete mechanisms.

“In essence, the 2024 MOU was a starting point. The current partnership is its formal and functional implementation,” the spokesperson stated.

Licensing Reciprocity, Not Automatic Passporting

While establishing a mechanism for mutual recognition of licenses between SCA and VARA, the agreement explicitly excludes automatic “passporting” of licenses across jurisdictional borders.

The spokesperson clarified: “Licensing reciprocity is a key feature of the partnership, but not automatic passporting.”

Under this agreement, a Virtual Asset Service Provider (VASP) licensed by one authority will be recognized by the other, however, operators will still be subject to coordination protocols and specific regulatory checks by both authorities.

“This includes AML/CFT assessments, operational readiness, and supervisory alignment, ensuring that national security and compliance standards remain robust,” the spokesperson emphasized.

For VASPs already operating or seeking entry into the UAE market, this partnership offers enhanced regulatory clarity, reduces duplication, and provides a streamlined pathway to achieving national coverage.

“It eliminates the need to navigate `separate, potentially conflicting` approval processes, lowering operational risk and improving speed to market,” the VARA representative noted.

“Furthermore, this initiative strengthens the UAE’s global appeal as a credible, innovation-first jurisdiction characterized by a unified approach to virtual asset oversight,” they added.

The partnership includes a unified VASP registration framework, mutual license recognition, real-time data sharing, joint supervision protocols, cross-jurisdictional Anti-Money Laundering (AML) coordination, and the formation of a legislative review committee.

The SCA has approved the creation of this committee, mandated to collaborate with VARA to evaluate and refine the UAE’s crypto regulations according to international best practices, signifying a commitment to a globally competitive regulatory environment.

Both regulators positioned the collaboration as a flagship initiative in positioning the UAE at the forefront of crypto governance. VARA CEO Matthew White termed the partnership a “pivotal moment” in preparing the UAE’s digital economy for the future. SCA CEO Waleed Al Awadhi stressed that transparency and trust are essential for attracting investment.

Part of Broader Regulatory Enhancement Efforts

While representing a direct collaboration between SCA and VARA, the spokesperson confirmed that this agreement is part of a wider UAE strategy to enhance national regulatory coordination.

“Ongoing dialogue exists with other regulators, including Abu Dhabi Global Markets (ADGM), and engages closely with local and international stakeholders to promote interoperability, supervisory consistency, and cross-border cooperation,” stated the VARA spokesperson.

“Future collaborations remain a strategic priority, the spokesperson concluded.