The United Arab Emirates (UAE) has taken a significant step toward adjusting its approach to crypto regulation. The Securities and Commodities Authority (SCA) of the country and the Dubai Virtual Assets Regulatory Authority (VARA) have been announced by a strategic partnership to unite UAE’s approach to crypto regulations.
In September, the regulators expressed their desire to work together towards uniting crypto frameworks in the country. One feature of the collaboration is that this will allow Dubai -based service licenses across the UAE, according to a Wednesday announcement shared with Cointelegraph.
A Vara spokesman told cointelegraph that the latest development was to formalize the agreement between the two regulators and “running for intent” with concrete mechanisms.
“In essence, 2024 MOU is a starting point. The current collaboration is its formal and functional implementation,” Vara said.
Reward licensing, not automatic passport
While the agreement establishes a mechanism for mutual recognition of licenses between SCA and Vara, it will not offer an automatic “passport” of licenses to the constituents.
“Reward licensing is a key feature of collaboration, but not automatic passports,” the spokesman said.
The speaker clarified that the agreement establishes a mechanism of recognizing each other between SCA and Vara.
This means that a vasp licensed by one authority may be recognized by others. However, they will be subject to coordination protocols and appropriate regulatory checks.
“This includes AML/CFT assessments, operational readiness, and administration alignment, ensuring that security and compliance standards will remain stable,” the cointelegraph spokesman told the cointelegraph.
For Vasp operating and wanting to operate in the UAE, collaboration provides the clarity of regulation, reduced copying and a already -vested route to the national scope.
Vara spokesman said it eliminates the need to navigate “separate, potentially conflicting” approval processes, which “lowers the risk of operating and improves market speed.”
“It also boosts the UAE’s global appeal as a credible, innovative idea with a unified approach to Virtual Asset Oversight,” the spokesman added.
Committee of SCA forms to refine regulations
The mechanisms include a Unified Virtual Asset Service Provider (Vasp) registration framework, mutual license recognition, real-time data sharing and joint administration protocols, cross-jurisdictional anti-money laundering (AML) coordination and the development of a resource analysis committee.
The SCA has approved the formation of the committee, which is ordered to cooperate with the vara to assess and refine crypto regulations in the country in accordance with international best practices. This signal is a promise from both parties to generate a global competitive environmental regulation.
Officials from both regulators described the collaboration as a key step in positioning the UAE as a crypto management leader.
Vara CEO Matthew White called the cooperation of “a pivotal moment” on traveling to the UAE’s digital digital economy. At the same time, SCA CEO Waleed Al Awadhi said transparency and trust are the center of investment.
Related: Rakbank became the first UAE Bank to offer crypto trading for retail
A greater effort to enhance regulation coordination
While recent development was a bilateral agreement between SCA and Vara, the cointelegraph spokesman told it as part of a broader UAE effort to enhance the coordination of national level regulation.
Vara said there was a continuing conversation between other regulators, including the Abu Dhabi Global Markets (ADGM) and local and international stakeholders to promote the interoperability, consistency of cross-border management and cooperation.
“Future partnerships will remain a strategic priority,” the spokesman added.
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