The Virtual Assets Regulatory Authority (VARA) stands as the world's first government body created exclusively for virtual asset regulation. Established under Dubai Law No. 4 of 2022, VARA has transformed Dubai from an ambitious challenger into the undisputed global leader in regulated crypto — licensing 507 VASPs managing over $25 billion in digital assets by February 2026.
VARA was established in March 2022 under Law No. 4 of 2022 Regulating Virtual Assets in the Emirate of Dubai. DLA Piper was appointed VARA's exclusive global advisor and worked closely with the authority to devise Dubai's first regulatory framework. The authority possesses full legal personality and financial autonomy, linked to the Dubai World Trade Centre Authority (DWTCA).
VARA's jurisdiction covers all virtual asset activities across Dubai's mainland and free zone territories, excluding the Dubai International Financial Centre (DIFC), which operates under the DFSA. In September 2024, VARA and the SCA entered a cooperation agreement ensuring VASPs licensed by VARA are automatically registered with the SCA, enabling UAE-wide operations.
VARA oversees seven categories of regulated virtual asset activities, each requiring specific licensing: VA platform operation and management, exchange between virtual assets and fiat currencies, exchange between virtual assets, VA transfer and settlement services, VA custody and wallet services, VA lending and borrowing, and VA advisory and management services. Additionally, all crypto businesses — licensed or not — must adhere to VARA's Marketing, Advertising and Promotions Regulations.
VARA operates a two-stage licensing process. Stage 1 (Initial Approval) requires submission of the Initial Disclosure Questionnaire through the relevant Free Zone Authority or Dubai Economy & Tourism, plus a comprehensive Regulatory Business Plan. Stage 2 (Full VASP License) requires hiring accredited personnel, passing technology assessments, and demonstrating adequate capital. The process typically takes four to seven months.
Capital requirements vary by activity: AED 15 million for exchange services, AED 10 million for custody, AED 5 million for broker-dealer activities, and AED 2 million for payment services. Authorization fees range from AED 40,000 to AED 100,000. All licensed entities appear on VARA's Public Register.
March 2022: VARA established under Law No. 4. February 2023: Full Market Product (FMP) Regulations and 12 rulebooks published. June 2023: Grievance Committee established for appeals. September 2023: FRVA (stablecoin) rules introduced. September 2024: SCA-VARA cooperation agreement for UAE-wide licensing. May 2025: Rulebook V2.0 issued — Sponsored VASP model, margin trading rules, enhanced issuance framework. January 2026: Privacy token ban enacted. February 2026: 507 licensed VASPs, $25B+ AUM.
VARA's approach has been studied and referenced by regulators worldwide. The FATF has recognized the UAE's comprehensive framework, and the country's removal from the grey list in 2024 validated the effectiveness of VARA's AML/CFT controls. The authority's FRVA rules have garnered particular attention from global regulators seeking collaboration on cross-border interoperability for stablecoin regulation.
Dubai's success has attracted headquarters relocations from Binance, OKX, Bybit, and Crypto.com, plus thousands of Web3 professionals via the Golden Visa program. The D33 Economic Agenda, which aims to double Dubai's economy by 2033, explicitly includes digital assets as a growth pillar.
Sources: VARA official publications, UAE Government Portal, DLA Piper, Dubai Media Office. See Disclaimer.
Dubai's D33 Economic Agenda aims to double the emirate's GDP by 2033, with digital assets and financial technology as explicit growth pillars. VARA is central to this strategy, providing the regulatory infrastructure that attracts global crypto capital. The 507 licensed VASPs represent an estimated 12,000+ direct jobs and tens of thousands of indirect positions in legal, compliance, technology, and support services. Dubai's positioning as the world's regulated crypto capital is not accidental — it reflects a deliberate, multi-year strategic investment in regulatory infrastructure, talent acquisition, and institutional frameworks.
VARA's model is unique globally. Unlike the US, where crypto regulation is fragmented between the SEC, CFTC, FinCEN, and state regulators, VARA provides a single comprehensive framework. Unlike the EU's MiCA, which requires implementation across 27 member states with varying interpretations, VARA offers a unified rulebook enforced by one authority. Singapore's MAS provides a comparable model but with narrower virtual asset definitions. Hong Kong's SFC framework is emerging but less mature. No jurisdiction matches VARA's combination of comprehensive regulation, zero income tax, Golden Visa talent attraction, and established banking access for licensed VASPs.
Consumer protection is a cornerstone of VARA's mandate. The framework requires: segregated client wallets that cannot form part of a VASP's estate in insolvency, mandatory disclosure of fees, risks, and material conflicts of interest, transparent marketing subject to VARA's advertising rulebook, Grievance Committee access for dispute resolution, and mandatory insurance or capital reserves to cover operational failures. These protections have been validated by the rapid growth in consumer adoption — UAE residents increasingly trust VARA-licensed platforms for crypto investment, bolstered by banking institutions integrating crypto services.
The Emirates Blockchain Strategy 2021 aimed to migrate 50% of government transactions onto blockchain technology. VARA's rapid licensing of 507 VASPs is a direct outcome of this broader national digital transformation vision. The authority operates within a coordinated ecosystem that includes the Dubai Future Foundation, Smart Dubai initiatives, and the Ministry of AI — the world's first such ministerial position. This institutional alignment between regulatory authority (VARA), government strategy (D33), and technology infrastructure ensures that virtual asset regulation is not isolated policy but integrated economic development. Looking forward, VARA's framework is expected to evolve to accommodate emerging categories including decentralized autonomous organizations (DAOs), AI-powered trading systems, and cross-chain interoperability protocols.