2025.10.10 CAI, Jing (Cathy)
Amid the wave of Web 3.0, a number of countries and regions are advancing legislation relating to virtual assets. Among these, Dubai stands at the forefront of virtual asset regulation and has become a key destination for Chinese companies expanding into the Middle East.
JunHe partner Jing Cai has invited Mr. Ruben Bombardi, general counsel of Dubai’s Virtual Assets Regulatory Authority (VARA), to answer questions regarding Dubai’s regulatory landscape for virtual assets. This article presents insights to help establish an understanding of Dubai’s legal framework for virtual assets.
We warmly invite companies that are planning to expand and establish virtual asset operations in Dubai to register for our upcoming seminar (the registration link is below). Join VARA representative and leading experts in Dubai’s virtual assets space for in-depth discussions on the latest developments and practical insights into this
rapidly evolving field.
I. What is the legal definition of virtual assets?
In Dubai, virtual assets are legally defined as digital representations of value that can be traded, transferred or used for exchange, payment or investment. This includes digital currencies (like Bitcoin and Ethereum), stable coins and utility tokens used in Web3 platforms. Virtual assets are different from digital securities or tokenised securities, which represent shares or bonds and fall under separate financial regulations. They also differ from broader digital assets (like e-documents or software) that may not have financial value. Dubai’s Virtual Assets Regulatory Authority (VARA) oversees these activities to ensure safety and trust in the ecosystem.
II. How are virtual assets-related activities regulated in Dubai?
Dubai has a clear framework to regulate virtual asset activities and is the world’s first jurisdiction to do so. VARA regulates Virtual Asset Service Providers (VASPs) carrying out virtual asset activities in or from the Emirate of Dubai, including exchange, broker-dealer, custody, asset management, lending and borrowing, transfer and settlement and advisory activities. Every licensed VASP must comply with four Compulsory Rulebooks plus the Activity-Specific Rulebooks relevant to its permission. In line with the ‘licence first’ rule, VASPs wishing to operate in Dubai must obtain a license from VARA and comply with rules on anti-money laundering (AML) and consumer protection. At the federal level, the UAE also sets broad financial crime and AML standards. One exception is the DIFC (Dubai International Financial Centre), which has its own regulator and rules for virtual assets.
III. Which governmental authorities supervise virtual asset related activities?
Securities & Commodities Authority (SCA): The federal regulator. It sets the overall legal framework via Cabinet Decision No. 111 of 2022 and oversees the licensing of VASPs outside special zones or in emirates without their own regime.
Virtual Assets Regulatory Authority (VARA): Dubai’s specialist agency, created under Dubai Law No. 4 of 2022. It regulates, licenses and supervises VASPs in the Emirate of Dubai (excluding DIFC), including free zones and special development zones.
Dubai Financial Services Authority (DFSA): Regulates virtual asset activities within the DIFC (financial free zone), under its own legal framework.
Financial Services Regulatory Authority (FSRA) in ADGM: ADGM is a free zone in Abu Dhabi. FSRA regulates virtual assets there under its distinct rules.
Central Bank of the UAE (CBUAE): Has oversight in areas involving payments, stablecoins, ‘stored value facilities’ and fiat-crypto interactions and ensures AML / financial stability in those flows.
IV. What are the current policies and practices in Dubai regarding RWA (tokenization of real-world assets)?
Dubai is now formally regulating real-world asset (RWA) tokenisation under its virtual asset’s framework. VARA’s May 2025 update to the Rulebook introduced Asset-Referenced Virtual Assets (ARVAs), which are tokens backed by physical assets (e.g. real estate, commodities and off-chain securities).1
Issuers of ARVAs need a Category 1 Virtual Asset Issuance License. They must publish a detailed white paper and risk disclosures, maintain audited reserves and adhere to oversight including monthly audits.2
Regarding real estate, Dubai has launched a tokenisation pilot via the Dubai Land Department (DLD),3 enabling fractional ownership of properties. DLD oversees the physical property and legal title aspects, while VARA regulates the digital tokens representing those assets. Only VARA-licensed companies are allowed to issue these tokens.
In the DIFC free zone, in 2025 the DFSA introduced a regulatory sandbox for RWA tokenisation (e.g., bonds, supply chain-finance and real estate) to allow experimentation under regulatory oversight.4
V. Why is Dubai a strong choice for overseas investment in Web 3.0 businesses?
With its clear regulatory framework, business-friendly environment and strong government backing for innovation, Dubai has emerged as a leading global hub and a top choice for Web3 businesses. Companies benefit from world-class infrastructure, easy market access across the Middle East, Africa and Asia and a growing pool of talent and investors; in short, it is a favorable business and regulatory ecosystem for VA. With a dedicated regulator for virtual assets, Dubai provides both clarity and confidence for companies exploring blockchain, virtual assets and tokenisation.
To help shape the next phase of this ecosystem, we cordially invite you to register for our exclusive upcoming seminar. This session is designed for leading industry players exploring Web 3.0 investment opportunities in Dubai and will feature in-depth discussions with VARA representative and top experts from Dubai’s virtual assets sector on the latest developments and offer practical insights. Seating is limited—secure your spot now by registering via the link below.
The registration link: https://junheevent.mikecrm.com/1Ysiks2
1.https://www.jawanpartners.com/news/dubai-tokenisation-regulatory-scope?
2.VARA_EN_293_VER20250519.pdf
3.https://dubailand.gov.ae/en/eservices/real-estate-tokenization#/
4.https://www.dfsa.ae/news/dfsa-begins-engagement-firms-selected-its-tokenisation-regulatory-sandbox-reinforcing-its-commitment-responsible-innovation-difc
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