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THE UAE DIGITAL ASSET REGULATORY FRAMEWORK (2026)
From 1 January 2026, the UAE's digital asset regulatory architecture is structured across five authorities. Here is what each covers and why it matters to your business.
CMA – Capital Markets Authority (Federal)
The former Securities and Commodities Authority (SCA) was replaced by the Capital Markets Authority (CMA) on 1 January 2026 under Federal Decree-Law No. 32 and No. 33 of 2025. This is not a rebrand. It is a structural overhaul of the federal capital markets framework — and it brings virtual assets explicitly within the federal regulatory perimeter for the first time.
Under Decision No. 4/R.M/2026, issued in February 2026, the CMA established a comprehensive federal VASP licensing framework covering eight licensed virtual asset activities. The new framework:
- Replaces the previous SCA virtual asset rules entirely
- Prohibits trading any virtual asset in the UAE unless it has been accepted onto the official CMA list and the platform operator is CMA-licensed
- Establishes minimum capital requirements from AED 500,000 to AED 4 million depending on activity
- Introduces absolute prohibitions on privacy tokens, algorithmic tokens and privacy-enhancing devices
- Sets a compliance deadline of 1 January 2027 for existing businesses to regularise their position
- Who this affects: Any virtual asset business operating at federal scale, seeking national reach across all UAE emirates, running a tokenised asset trading platform, or currently operating under a former SCA licence.
- CMA licensed activities include: Exchange services, brokerage, custody, portfolio management, investment advisory, transfer services, token offering facilitation, and lending against virtual assets.
CBUAE – Central Bank of the UAE (Payment Tokens / Stablecoins)
The Central Bank of the UAE regulates stablecoins and payment tokens through the Payment Token Services Regulation (PTSR), issued under Circular No. 2/2024, effective from 31 August 2024. This framework applies across the UAE, including to VARA-licensed entities, but excludes DIFC and ADGM, which have their own frameworks.
The PTSR governs:
- Payment Token Issuance- creation and management of stablecoins, including AED-denominated dirham-backed tokens
- Payment Token Conversion- exchanging payment tokens for fiat currency or other tokens
- Payment Token Custody and Transfer- safekeeping and movement of payment tokens
Key regulatory requirements under the PTSR:
- 100% reserves in liquid, high-quality assets- at least 50% held as cash in UAE banks
- Tokens redeemable at par within one business day
- Minimum initial capital of AED 15 million, plus additional capital linked to tokens in circulation
- Monthly audits by an external auditor
- Prohibition on paying interest on payment tokens held
- Ban on algorithmic stablecoins
- Foreign payment tokens cannot be used for domestic goods and services purchases
- The first licensed AED-backed stablecoin, AE Coin, was approved by the Central Bank in December 2024 and is already integrated into UAE payment infrastructure.
- Who this affects: Stablecoin issuers, payment token custodians and converters, fintech businesses with payment token functionality, and any VARA-licensed VASP that also handles payment tokens.
VARA – Virtual Assets Regulatory Authority (Dubai Mainland & Free Zones excluding DIFC)
VARA is the dedicated regulator for virtual asset activities across the emirate of Dubai (excluding the DIFC). Operating under VARA Rulebook Version 2.0 (published May 2025), VARA licenses VASPs across a range of activities including exchange, brokerage, custody, lending, staking, and investment management of virtual assets.
VARA's two-stage licensing process- MVP Licence (Minimum Viable Product) and FMP Licence (Full Market Product)- governs how businesses enter and scale within Dubai's virtual asset market. VARA compliance requirements include governance documentation, AML/CFT programmes, technology risk policies, and ongoing supervisory obligations including the Travel Rule, which became binding in practice from February 2026.
Important jurisdictional note: The CMA's federal framework operates alongside VARA, not instead of it. A Dubai-based VASP may be subject to both VARA and CMA requirements simultaneously, depending on its activities.
Who this affects: Crypto exchanges, trading platforms, custodians, brokers, virtual asset investment managers, Web3 consumer platforms, and digital asset lenders operating in or from Dubai mainland.
DFSA – Dubai Financial Services Authority (DIFC)
The DFSA regulates digital assets within the DIFC under its Investment Token and Crypto Token frameworks. Investment Tokens — digital assets constituting investments under DIFC law — are regulated financial instruments. Enhanced governance standards came into force from 12 January 2026, and a ban on privacy tokens on DIFC exchanges was announced in January 2026.
The DFSA framework is well-suited to: institutional digital asset businesses, security token issuances, tokenised funds and investment structures, digital asset managers serving professional and institutional clients, and businesses requiring the DIFC courts, legal system and international brand alongside digital asset activity.
FSRA – Financial Services Regulatory Authority (ADGM)
The FSRA within ADGM operates the most comprehensive single-regulator digital asset framework in the UAE, with an updated Financial Regulatory Toolkit (FRT) framework in force from 1 January 2026. The FSRA covers custody, exchange, brokerage, OTC derivatives, lending, staking and institutional digital asset structures under a unified rulebook.
The FSRA framework is well-suited to: institutional custody providers, exchanges with derivatives capabilities, hedge funds with digital asset strategies, and businesses requiring a single, comprehensive regulatory framework for complex activities including structured products and institutional asset management.
Our Digital Asset Legal Services
We advise across all five UAE digital asset regulatory frameworks and deliver the legal work required to implement that advice. Our role does not stop at high-level guidance; we structure, draft and prepare the underlying documentation needed to move matters forward.
Who We Work With
Virtual Asset Service Providers (VASPs)
Stablecoin Issuers and Payment Token Businesses
Digital Asset Fund Managers
RWA Tokenisation Platforms and Issuers
Family Offices, Treasury Vehicles and Principal Investors
Foundations, DAOs and Ecosystem Structures
Banks, Payment Firms and Financial Institutions
Web3 and Blockchain Startups
Ready to Navigate UAE Digital Asset Regulation?
Whether you're pursuing a VARA licence, structuring a stablecoin, or launching a digital asset fund, we help you move forward with confidence.