UAE regulator opens licensing application for virtual asset service providers amid growing marketAs the global digital asset market continues to flourish, the United Arab Emirates (UAE) is taking proactive steps to enhance the regulatory landscape for virtual asset service providers. The country’s financial regulatory agency, the Securities and Commodities Authority (SCA), has recently announced its plan to accept licensing applications for firms in this rapidly evolving sector. With a keen focus on investor protection and fostering a robust financial environment, the UAE is positioning itself as an attractive hub for global companies and institutions operating in the virtual assets domain.
Securities and Commodities Authority (SCA) to regulate virtual asset services
The United Arab Emirates’ (UAE) federal financial regulatory agency, the Securities and Commodities Authority (SCA), declared its intent to begin accepting licensing applications from companies seeking to offer virtual asset services within the country. In a press release, the SCA stated that all virtual asset service providers (VASPs) operating in the UAE must apply for a license, with the exception of those already licensed within the nation’s financial free zones.
Exemptions and limitations for financial free zones and payment-focused assets
Digital asset companies based in Dubai must still adhere to regulations set forth by the emirate’s financial regulator, the Virtual Asset Services Authority (VARA), and apply for a license through VARA. The UAE’s Cabinet issued resolution number 111 of 2022 on December 11, 2022, which aims to create an appealing investment, economic, and financial environment for global companies and institutions in the virtual assets sector. The SCA announced its role in regulating and supervising the virtual assets sector according to the cabinet resolution on February 1. The resolution’s objective is to protect investors’ funds in virtual assets from illegal practices.
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