The Virtual Assets Regulatory Authority (VARA) of Dubai has unveiled the second edition of its regulatory framework for virtual asset (VA) activities. The updated rulebooks introduce more comprehensive standards and more precise compliance requirements, reinforcing Dubai’s commitment to a secure and transparent digital asset ecosystem.
The updated framework sets out enhanced guidelines for margin trading, token distribution, and collateral wallet arrangements. It also unifies compliance benchmarks across virtual asset service providers (VASPs), covering advisory, custody, exchange, lending, borrowing, and investment services.
Key updates include:
- Margin Trading: VASPs may only offer margin trading with explicit VARA authorization, which must be reflected in their license.
- Custody & Collateral Services: Custody providers must obtain special approval from VARA to offer collateral wallet services.
- Token Distribution Restrictions: Non-VARA licensed entities are barred from distributing stablecoins or asset-referenced tokens. They may only distribute limited-scope tokens (e.g., closed-loop tokens) through authorized VARA-licensed intermediaries.
To facilitate compliance, VARA has established a 30-day transition period, during which all active VASPs must align their operations with the updated regulations by June 19, 2025. VARA will also provide entity-specific guidance to support the implementation process.
While these revisions may increase compliance responsibilities for market players, they are expected to strengthen investor trust and reinforce Dubai’s role as a transparent, well-regulated hub for virtual asset innovation.
By implementing these enhanced measures, Dubai reaffirms its vision to create a secure, innovative, and well-governed digital economy that aligns with international standards, while supporting growth and responsible participation in the virtual asset space.
