INTRODUCTION
As a world leader in the blockchain and cryptocurrency space, the UAE is establishing itself as an attractive location for companies looking to work in the virtual asset industry. For Virtual Asset Service Providers (VASPs) such as cryptocurrency exchanges, custodians, brokers, and token issuers wishing to set up shop in the area, the nation provides a clear route thanks to its solid regulatory framework. The following guide explains the many authorities, legal frameworks, and licenses involved in the process of acquiring a crypto license in the United Arab Emirates.
OVERVIEW OF THE UAE’S CRYPTO REGULATORY FRAMEWORK
The UAE takes a unique approach to crypto regulation by employing both federal and emirate-specific laws. It also implies that laws vary according to a firm's location and the kind of virtual asset activity it engages in. The regulatory agencies in charge of the UAE's cryptocurrency industry are:
Securities and Commodities Authority (SCA) – Federal regulator for virtual asset activities across the mainland UAE.
Dubai Virtual Assets Regulatory Authority (VARA) – Regulates virtual assets in Dubai’s mainland and free zones (except for DIFC).
Abu Dhabi Global Market's Financial Services Regulatory Authority (FSRA) – Oversees virtual asset activities within the ADGM financial free zone. ADGM’s crypto regime is based on the Guidance – Regulation of Virtual Asset Activities in ADGM (2019, updated 2022 & 2025).
These authorities establish a balanced regulatory framework that promotes the expansion of businesses while ensuring adherence to global norms for investor protection, financial stability, and anti-money laundering (AML) procedures.
THE ROLE OF THE SECURITIES AND COMMODITIES AUTHORITY (SCA)
The major federal agency in charge of monitoring virtual asset activity throughout the UAE mainland is the Securities and Commodities Authority (SCA). The SCA was set up according to SCA Decision Number 23/RM/2020 and Federal Law Number 4 of 2000, which both offer legal justification for the regulation of operations, including custodial services, trading platforms, exchanges, and the issuance of crypto assets.
Scope of Operations: The jurisdiction of the SCA extends to any cryptocurrency-related enterprise that operates on the UAE mainland outside of authorised free zones such as ADGM or DIFC. It offers thorough management over a variety of virtual asset operations, guaranteeing that these businesses function in accordance with established financial market frameworks.
AML/CFT Compliance: The SCA offers anti-money laundering (AML) and countering the financing of terrorism (CFT) a lot of attention. Businesses covered by the SCA are required to put in place robust risk management procedures, carry out extensive customer due diligence (CDD), and report suspicious behaviour using the goAML portal in the United Arab Emirates.
New Regulations on Tokenisation: A recent update in 2025, introduced through Cabinet Decision Number 111/2022, focuses on security tokenisation. This framework facilitates the integration of virtual assets with traditional financial markets, offering more opportunities for the tokenisation of traditional securities like stocks and bonds, and creating a legal structure for security token offerings (STOs).
Focus on National Coverage: Aligning with the SCA is a necessity if your company plan calls for operating all throughout the United Arab Emirates. Large-scale cryptocurrency enterprises would benefit greatly from the SCA's approach, which has higher capital requirements but gives wide statewide coverage.
Implication for Startups: The SCA may not be the ideal jurisdiction for new businesses seeking greater flexibility, given that it offers extensive federal monitoring. Due to strict regulatory regulations, small businesses may find the process more difficult.
THE ROLE OF THE DUBAI VIRTUAL ASSETS REGULATORY AUTHORITY (VARA)
Under Dubai Law Number 4 of 2022, the Dubai Virtual Assets Regulatory Authority (VARA) was created with a specific objective of regulating the emirate of Dubai's quickly expanding virtual assets industry. Virtual assets are regulated by VARA in the mainland and free zones of Dubai, but not in the Dubai International Financial Centre (DIFC), which has its own regulatory structure.
Modular Licensing System: VARA's modular license structure is among its attractive attributes. This method is scalable for both startups and larger organisations since it allows corporations to apply for licenses according to specific operations. Instead of asking for a license that covers all services, for example, if the business just offers crypto custody services, you can apply for the specific module.
Clear Guidelines on Operations: Regarding activities such as cryptocurrency exchanges, broker-dealer services, and crypto guidance, VARA provides precise and explicit requirements. For companies wishing to enter the market, these rules are essential since they assure compliance with regional regulatory requirements as well as global best practices for user safety and risk management.
Focus on Innovation: VARA is committed to promoting innovative blockchain-based business ideas and seeks to create a model for virtual asset regulation that can be duplicated globally. As a result, VARA provides greater regulatory compliance flexibility while placing an intense focus on encouraging development, innovation, and the creation of an atmosphere that supports new technologies in the cryptocurrency industry.
Recent Regulatory Updates: VARA tightened its marketing regulations in 2025 to control the promotion of virtual assets. In order to assist in preventing fraud and guarantee that only legitimate firms can participate in promotional activities, these guidelines restrict advertising to only licensed entities. This step is a component of the endeavour to maintain the integrity of the cryptocurrency industry.
Best for High-Growth Startups: VARA is especially interesting to startups and crypto-native companies because of its adaptability and emphasis on promoting innovation. Businesses can start small and grow as they venture into new services or activities thanks to the modular approach.
THE ROLE OF THE FSRA IN ADGM
One of the top financial free zones in the world, the Abu Dhabi Global Market (ADGM), is host to the Financial Services Regulatory Authority (FSRA). Since its establishment in 2018, the FSRA has governed virtual asset operations and offered an extensive structure for companies offering institutional-grade or high-value digital asset services.
Institutional Grade Regulations: The FSRA's structure, which focuses on ensuring that crypto firms comply with strict regulatory criteria, is appropriate for institutional players or large-scale enterprises. Companies engaged in cross-border operations or that are interested in institutional investors find the ADGM's regulations to be very appealing because they are in line with worldwide financial regulations.
Prudential Capital Requirements: To protect investors and guarantee the financial stability of cryptocurrency enterprises, ADGM's policies emphasise maintaining large capital reserves. Higher capital requirements are required for more complicated services, and the FSRA has special regulations for multiple activities, such as running cryptocurrency exchanges or providing custody services.
Stablecoins and Digital Asset Custody: Regarding stablecoin regulation, the FSRA has specific guidelines, especially in light of recent changes to the Central Bank of the UAE (CBUAE) regulations that only permit stablecoins backed by the UAE dirham. Businesses that deal with fiat-backed tokens or intend to issue their own stablecoins should take this into account.
Focus on Financial Stability: The FSRA makes sure that cryptocurrency companies comply with capital adequacy ratios, risk assessments, and audit standards, considering that ADGM's regulatory focus is on financial stability. Because of this, ADGM is an appropriate jurisdiction for businesses or institutions that provide advanced financial services in the cryptocurrency market.
Cross-Border Capabilities: The FSRA establishes a solid regulatory structure that is recognised by foreign regulators, offering credibility and worldwide access to businesses that intend to conduct business globally or engage in activities like over-the-counter (OTC) trading
SELECTING THE APPROPRIATE REGULATORY JURISDICTION FOR CRYPTOCURRENCY BUSINESSES IN THE UAE
Selecting the right jurisdiction is one of the most important choices a cryptocurrency company must make. The location you select will have an effect on your ability to scale operations, capital needs, and license fees.
Business Location: If your business is located in Dubai (outside of DIFC), VARA is mandatory. For businesses based in Abu Dhabi, ADGM and the FSRA are the appropriate regulators. If you aim to operate across the entire UAE mainland, the SCA is the federal regulator for such activities.
Business Model and Scale: Startups might prefer VARA’s modular licensing structure because it provides flexibility. Larger, institutional operations may be better suited for the FSRA in ADGM, which offers institutional-grade compliance frameworks. The SCA is ideal for businesses that want to engage in tokenisation or federal-level trading across the mainland.
Regulatory Support and Cost Considerations: VARA offers a more flexible entry point but requires ongoing audits and compliance checks. ADGM, while more expensive upfront, offers access to a global financial network. The SCA’s requirements are more aligned with traditional finance, making it a good choice for businesses that wish to integrate with established financial markets.
STEP-BY-STEP GUIDE TO OBTAINING A CRYPTO LICENSE
Step 1: Define Your Business Activities
Clearly defining your business operations is the first step in applying for a crypto license. For example, each regulatory body has its own set of laws that apply to distinct activities, such as launching a token issuance platform, custodial services, or a cryptocurrency exchange.Step 2: Select the Appropriate Jurisdiction
Choose the jurisdiction that best suits your business needs after you have a clear idea of the activities you will be participating in. In the jurisdiction where your firm will operate, register your company. This could involve opening a bank account, renting office space, and making sure your operations conform to local business laws.Step 3: Prepare Documentation
You will need to submit comprehensive documentation during the application process. This will include your business plan, financial forecasts, AML/KYC policies, and cybersecurity protocols. Ensure that all documentation aligns with the requirements of the regulator you're applying to.Step 4: Submit the Application
After preparing your documents, submit your application via the relevant portal. The application will undergo due diligence to ensure that your business complies with all regulatory requirements.Step 5: Fulfil Post-Approval Obligations
Once approved, you will need to fulfil ongoing obligations such as annual audits, cybersecurity drills, and maintaining your capital requirements.
CONCLUSION
A thorough understanding of the regulatory environment and the particular needs of several authorities, such as the ADGM and the DIFC, is required to obtain a cryptocurrency license in the United Arab Emirates. Identifying the appropriate jurisdiction is essential because every free zone has a unique framework designed for cryptocurrency enterprises. In compliance with Federal Decree-Law Number 20 of 2018 (AML Law), the procedure entails presenting a business strategy, obtaining regulatory body approvals, and following strict Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. Additionally, long-term performance depends on respect for employment regulations under Federal Decree-Law Number 33 of 2021 and tax regulations under Federal Decree-Law Number 47 of 2022 on Corporate Tax. Businesses that are capable of navigating the licensing process might benefit greatly from the UAE's advantageous position on cryptocurrency. Entrepreneurs can take advantage of one of the most crypto-friendly environments in the world and position themselves for success in a sector that is shifting quickly by following the steps outlined.
