Understanding VARA’s Regulatory Framework and Cross-Jurisdictional Coordination

The regulatory architecture governing virtual assets in the Emirate of Dubai operates through a carefully coordinated framework in which the Virtual Assets Regulatory Authority (“VARA”) exercises direct jurisdiction while maintaining structured cooperation with relevant UAE regulatory bodies.Understanding these inter-regulatory relationships is essential for entities navigating the virtual asset licensing landscape, as jurisdictional clarity, supervisory coordination, and compliance obligations depend fundamentally on VARA's interaction with other authorities.

VARA's Jurisdictional Scope

VARA was established under Law No. 4 of 2022 and is the primary regulatory authority for virtual assets and related activities across all zones in Dubai, including free zones, except for the Dubai International Financial Centre (DIFC), which is governed by the Dubai Financial Services Authority (DFSA).Cabinet Resolution No. 111 of 2022 designates the Securities and Commodities Authority (SCA) as the federal regulator, while VARA exercises delegated authority in Dubai.

Cooperation with Other Regulators

VARA coordinates with the SCA, DFSA, and the UAE Central Bank to ensure a harmonized regulatory environment. This cooperation covers licensing, AML/CFT obligations, and supervisory oversight.

Licensing Coordination

Entities seeking to operate in Dubai must obtain a VARA licence, which is recognized by the SCA for federal compliance. VARA also works with the Dubai Economy and Tourism Department (DET) to align licensing with broader business regulations.