Key Takeaways
- Dubai’s Virtual Asset Regulatory Authority (VARA) was established in 2022.
- The authority is the world’s first dedicated crypto regulator.
- Crypto firms are now flocking to Dubai and the wider UAE.
The United Arab Emirates (UAE) has emerged as a major crypto hub in recent years, thanks to its welcoming legal and policy environment, as showcased by Dubai’s Virtual Asset Regulatory Authority (VARA).
Crypto businesses are so keen to set up shop in the emirate that, according to one hedge fund manager, the VARA has been inundated with over 850 license applications.
The UAE’s Crypto Hub Ambitions
The UAE’s efforts to establish a domestic digital asset industry date back to at least 2016, when Sheikh Mohammed bin Rashid unveiled the UAE Blockchain Strategy.
In 2018, Abu Dhabi’s Financial Services Regulatory Authority (FSRA) introduced one of the world’s first comprehensive regulatory frameworks for crypto assets, positioning the emirate as an early leader in crypto adoption.
Not to be outdone, Dubai followed suit with its own Virtual Asset Law in 2022, establishing the VARA as the world’s first dedicated crypto regulator.
Building on their respective strengths, Dubai and Abu Dhabi have carved out specific niches that complement each other, with the former focusing on retail services and the latter emerging as an institutional, capital-rich, regulatory stronghold.
Queuing up for VASP Licenses
With the UAE emerging as a crypto powerhouse, firms including Binance, OKX, and Hashkey have received Dubai’s virtual asset service provider (VASP) license.
Since the framework was launched in 2022, 36 VASP licenses have been issued. But according to Nine Blocks Capital founder Henri Arslanian, more than 850 companies are queuing up to register.
In an interview with CNBC, Arslanian pointed out that many global crypto firms now have their headquarters in Dubai or Abu Dhabi and called the UAE “the global crypto hub.”
CBUAE Supports Stablecoins
Beyond the regulatory clarity provided by the VARA and the FSRA, Arslanian said the UAE’s central bank (CBUAE) has also been supportive of the crypto sector.
In 2024, the CBUAE issued its Payment Token Services Regulation (the PTSR) for regulating stablecoin-related services in the UAE.
Foreshadowing legislation like the U.S. GENIUS Act, the PTSR requires all stablecoin issuers to register with the central bank and prohibits payments with unregistered coins.
The rulebook provides an explicit carveout for activities within the Dubai International Financial Centre (the DIFC) and the Abu Dhabi Global Market (the ADGM), where oversight is left up to local financial regulators.
This model reflects a central tenet of Emirati crypto policy—that strict doesn’t have to mean restrictive.
For example, the country takes a hard line on privacy coins and algorithmic stablecoins, which are essentially outlawed under the PTSR. But far from scaring off crypto businesses, the UAE’s hard and fast digital asset rules provide much-needed clarity, removing the kind of legal guesswork that has plagued other jurisdictions.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
