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Comparison of UAE Virtual Asset Regulations: Key Differences Between ADGM and VARA
UAE Crypto Assets Regulation: Similarities and Differences Between Abu Dhabi and Dubai
The UAE, with its advantageous geographical location, clear support for crypto asset policies, and favorable tax policies, has become one of the important centers for global crypto assets and blockchain innovation. In the regulatory field of virtual assets in the UAE, the Abu Dhabi Global Market (ADGM) and the Dubai Virtual Assets Regulatory Authority (VARA) each have their own characteristics. This article will explore in depth the key content and differences in compliance regulation between Abu Dhabi and Dubai.
Regulatory Overview of Abu Dhabi and Dubai
Abu Dhabi
As an international financial center, ADGM aims to support regional economic strategies and serve as a global financial and business hub. Its independent regulatory body, the Financial Services Regulatory Authority (FSRA), is responsible for overseeing and enforcing ADGM's Crypto Assets regulatory provisions.
The FSRA regulates virtual assets as a specific asset class within the financial industry. Therefore, the scope of the crypto assets licenses it issues is relatively limited, lacking a specialized customized regulatory framework. The application process typically takes six to seven months, with strict compliance requirements for applicants, following the licensing standards of traditional financial institutions. This results in a high barrier to entry for exchanges with a technological background, while traditional financial institutions have a greater advantage in transitioning to engage in crypto business.
Dubai
The virtual asset licensing in Dubai is divided into two major systems:
Dubai International Financial Centre (DIFC): As a financial free trade zone, its regulatory model is similar to that of ADGM. Its independent regulatory authority, the Dubai Financial Services Authority (DFSA), classifies virtual assets as tokenized assets within financial instruments for regulation. The application period is approximately seven to eight months, primarily aimed at large institutions with financial qualifications. DIFC also offers a special channel for "Innovation Licenses," allowing purely technology development companies (not involved in client fund custody or financial transactions) to be approved in about three months.
Virtual Assets Regulatory Authority (VARA): A regulatory body set up by the Dubai government that does not directly issue business licenses but rather overlays virtual asset operating licenses on existing company licenses. Its regulatory scope covers mainland businesses and free zone companies in Dubai (excluding DIFC), authorizing specific virtual asset businesses through a licensing mechanism.
In addition, the Securities and Commodities Authority (SCA) is responsible for regulating ICOs and token issuance activities. Companies planning to conduct ICOs in the UAE may need to obtain approval from the SCA.
Main Differences Between VARA and ADGM
Institutional Nature and Positioning
jurisdiction
Regulation Scope of Virtual Asset Activities
Application Conditions and Requirements
Company Registration:
Office Space:
Regulatory Capital:
Application Process and Time
VARA:
ADGM:
required fee
VARA:
ADGM:
By understanding the similarities and differences in virtual asset regulation between Abu Dhabi and Dubai, crypto practitioners can better choose a regulatory environment that suits their business, ensuring legal and compliant operations, and contributing to the healthy development of the entire crypto industry.