The United Arab Emirates (UAE) has taken a step towards unified cryptocurrency regulation. The Securities and Commodities Authority (SCA) and the Dubai Virtual Assets Regulatory Authority (VARA) announced a strategic partnership aimed at unifying cryptocurrency regulation in the UAE.
The two regulatory agencies expressed intentions to cooperate in September, planning to unify the cryptocurrency framework nationwide. According to Cointelegraph on Wednesday, this cooperation will allow Dubai licenses to serve the entire UAE.
According to the VARA spokesperson, this development formalizes the intention and implements it through specific mechanisms.
Mutual recognition of licenses rather than automatic approval.
The agreement establishes a mutual recognition mechanism for licenses between the SCA and VARA, but does not provide for automatic 'approval' across jurisdictions.
The spokesperson pointed out that the agreement establishes a mutual recognition mechanism between the parties, meaning that a virtual asset service provider (VASP) authorized by one party can be recognized by the other, but must comply with coordination and relevant regulatory checks.
This includes assessments for anti-money laundering/counter-terrorism financing, operational readiness, and regulatory coordination, ensuring robust national security and compliance standards.
For VASPs operating in or seeking to enter the UAE, the collaboration provides regulatory clarity, reduces redundancy, and simplifies the nationwide coverage route.
The spokesperson stated that this initiative eliminates potentially conflicting approval processes, reduces operational risks, and enhances market entry speed.
The SCA has established a committee to refine regulations.
The mechanism includes a unified VASP registration framework, mutual recognition of licenses, real-time data sharing, joint supervision agreements, cross-jurisdictional anti-money laundering coordination, and the establishment of a legislative review committee.
The SCA has approved the establishment of the committee to collaborate with VARA to assess and refine the national cryptocurrency regulations to align with international best practices.
Officials from both agencies have described this cooperation as an important step in positioning the UAE as a leader in cryptocurrency governance.
Broader efforts to enhance regulatory coordination.
This bilateral agreement is part of the UAE's broader efforts to enhance national regulatory coordination. VARA noted that dialogue with the Abu Dhabi Global Market (ADGM) and other stakeholders is ongoing to promote cross-border cooperation and regulatory consistency.
The spokesperson added that future cooperation remains a priority strategy.
