Abu Dhabi, 5 September 2024 – In a landmark move to solidify the UAE’s position as a global hub for virtual assets, the Securities and Commodities Authority (SCA) and Dubai’s Virtual Assets Regulatory Authority (VARA) have signed a cooperation agreement. This partnership aligns with the UAE’s long-term vision under the ‘Principles of the 50’ to build a world-leading, dynamic economy.
The agreement was formalized at a signing ceremony held at the SCA’s Dubai branch, attended by His Excellency Mohamed Ali Al Shorafa, Chairman of the SCA, and His Excellency Helal Saeed Al Marri, Chairman of VARA’s Executive Board. The signing was conducted by Her Excellency Dr. Maryam Buti Al Suwaidi, CEO of SCA, and Mr. Matthew White, CEO of VARA, in the presence of senior officials from both organizations.
HE Mohamed Ali Al Shorafa emphasized the importance of cross-agency collaboration to attract global businesses to the UAE’s burgeoning financial sectors, including virtual assets. He highlighted the growing interest and rapid development in the virtual asset space, which requires unified frameworks to ensure sustainable growth and regulatory stability.
“We strive to establish effective frameworks in cooperation with our partners to foster the growth and stability of the virtual assets sector in the UAE, thus ensuring the enforcement of anti-money laundering legislation and bolstering confidence in the UAE’s investment ecosystem,” HE Al Shorafa remarked.
HE Helal Al Marri echoed this sentiment, stressing the significance of regulatory alignment across the UAE. “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. Our collaboration with federal partners like the SCA ensures seamless and efficient passportability of regulated services while safeguarding market risk assurance.”
Strengthening the UAE’s Virtual Asset Framework
The agreement paves the way for the SCA and VARA to develop rules and procedures for licensing and supervising virtual asset service providers (VASPs) and related transactions. This initiative is part of the implementation of Cabinet Decision No. 111 of 2022 and No. 112 of 2022, which regulate virtual assets and their service providers.
VASPs operating in or wishing to service Dubai must obtain a license from VARA and can be registered with the SCA to operate throughout the UAE. Meanwhile, those operating outside Dubai in other Emirates require an SCA license. The agreement also details mutual supervision mechanisms, penalties, and information exchange, ensuring a unified approach to compliance.
Ensuring Investor Protection and Responsible Innovation
HE Al Shorafa noted that the agreement is aligned with the UAE government’s broader directives to regulate the virtual assets sector and protect investors by ensuring compliance with anti-money laundering regulations, as well as combating the financing of terrorism and illegal organizations. This framework boosts investor confidence in the UAE’s virtual asset landscape, ensuring resilience amid global challenges.
HE Al Marri highlighted the role of this collaboration in Dubai’s 2033 Economic Agenda, which outlines the roadmap to becoming a global hub for innovation-driven industries. “This regulatory collaboration and clarity assure consumers, investors, and the international business community of the UAE’s position as a world-leading hub for the future of finance,” he said.
About the SCA and VARA
The SCA, as per Cabinet Decision No. 111 of 2022, is tasked with overseeing, supervising, and regulating the virtual assets sector across the UAE, including free zones. Its primary mandate is to enhance the sector’s legislative framework, protect stakeholders, and ensure compliance with international standards.
VARA, established in March 2022 under Law No. 4 of 2022, is responsible for the governance of virtual assets across Dubai, including Special Development Zones and Free Zones, excluding the Dubai International Financial Centre. VARA plays a key role in shaping Dubai’s advanced legal framework, supporting investor protection, and enabling a borderless economy.
This collaboration marks a significant step in the UAE’s journey toward becoming a leading global center for virtual assets, further establishing its leadership in the financial technology sector.
For more information, visit www.vara.ae.
