Dubai VARA licensing: a practical guide for virtual asset businesses.

Dubai’s Virtual Assets Regulatory Authority, VARA, runs one of the most detailed licensing regimes for crypto businesses anywhere. For exchanges, brokers, custodians and token issuers targeting the Gulf, structuring for VARA from day one saves time later.

The legal basis

VARA was established by Dubai Law No. 4 of 2022. Its Virtual Assets and Related Activities Regulations, issued on February 7, 2023, set out the framework. VARA’s remit covers Dubai, including its special development zones and free zones, but not the Dubai International Financial Centre, which has its own regulator.

Licensed activities

A VARA licence specifies each virtual asset activity a firm is permitted to carry out, and each activity must be applied for and approved. The regulated activities are:

• Advisory Services
• Broker-Dealer Services
• Custody Services
• Exchange Services
• Lending and Borrowing Services
• VA Management and Investment Services
• VA Transfer and Settlement Services

The VARA rulebooks

Licensed firms follow four core rulebooks — Company; Compliance and Risk Management; Technology and Information; and Market Conduct — plus rulebooks for each licensed activity. VARA issued updated versions of all twelve rulebooks in 2025, with full compliance required by June 19, 2025.

Issuing tokens in Dubai

• Category 1 VA Issuance — fiat-referenced and asset-referenced virtual assets, including tokens that represent real-world assets, require a license and VARA’s prior approval.
• Category 2 issuance — other issuances need no VARA license, but distribution must run through a VARA-licensed distributor.
• Exempt virtual assets — certain non-transferable, closed-loop assets have no pre-issuance requirements.

Practical steps

• Define your activities precisely; your licence will list each activity you are approved to carry out, and each must be applied for.
• Choose the right setup — mainland or free zone — and the local substance it requires.
• Build governance, AML/CFT, technology and market-conduct controls that match the rulebooks.
• For token projects, decide early which issuance category applies.
• Plan marketing carefully: VARA’s Market Conduct Rulebook governs advertising and promotion.

Our outlook: Dubai is building for permanence

Our thesis: Dubai is positioning VARA as a long-term institutional market, and the bar will keep rising.

The evidence is in the build-out. VARA rewrote its activity rulebooks in 2025 and gave firms 30 days to comply, and by July 2026 it had licensed 50 virtual asset service providers. A regulator that iterates that quickly while firms keep arriving is building a market designed to last.

What we expect next: closer supervision of marketing and of Category 1 issuance, especially tokenized real-world assets, and continued insistence on genuine local substance. Firms that treat the rulebooks as a design brief rather than a hurdle will move through licensing and supervision faster.

Dubai sits at a crossroads of Europe, Africa and Asia. A well-governed virtual asset market there can connect capital and talent across all three, and that opportunity is worth protecting with strong governance and honest conduct.

The bottom line

VARA is an operating regime. Enter with clear intentions, strong controls and good counsel, and Dubai can become a durable base for growth across the region. Crypto Law Hub works with locally admitted UAE counsel on Gulf market entry.

Crystal V. Venning, Esq.

Founder and Managing Partner, Crypto Law Hub. Admitted in New York, Texas and Georgia. Educated at Yale University and Columbia Law School (J.D.). She advises founders, funds and institutions on digital-asset law, from stablecoins and token offerings to disputes and cross-border launches.