A.SREENIVASA REDDY (ABU DHABI)
The Capital Market Authority (CMA) recently issued a framework for regulating business activities in the virtual assets sector with an aim of supporting “responsible innovation within a clear and effective regulatory environment”.
Aletihad caught up with experts to understand what the move means for the digital assets ecosystem and how it complements existing regulatory regimes across the UAE.
The two existing regulatory frameworks are overseen by the Financial Services Regulatory Authority (FSRA) in the Abu Dhabi Global Market (ADGM) and the Virtual Assets Regulatory Authority (VARA) in Dubai.
Cathal Burke, Director of Marketing and Communications at Dubai’s VARA, described the CMA framework as “a natural evolution of the UAE’s broader regulatory architecture, rather than a competing regime”.
“At its core, the CMA framework integrates virtual assets into the federal capital markets perimeter, with a strong emphasis on market integrity, listing controls, and investor protection,” Burke said, noting that trading is permitted only for assets admitted to an official list and transacted via licensed platforms, reflecting a “securities-style regulatory model”.
He highlighted that VARA’s own framework differs in design, as it was “purpose-built from the ground up for virtual assets as a distinct asset class, rather than adapting legacy securities rules.”
It operates as an activity-based regime covering the full lifecycle of services, including issuance, exchange, custody, lending and transfer. “This allows for more granular supervision of emerging models such as DeFi, tokenisation, and non-custodial structures, while maintaining clear guardrails for retail and institutional participation,” he added.
VARA’s approach is more akin to a specialised market regulator for a new asset class, whereas the CMA framework embeds virtual assets within the broader financial system, Burke said.
Importantly, Burke stressed that the two approaches are complementary. “The CMA framework establishes a national baseline for market conduct and investor protection, while VARA provides a deep, operationally focused regime within Dubai,” he said, adding that the UAE is moving towards a “multi-layered regulatory model” that balances global credibility with regulatory agility.
The CMA’s newly issued framework serves as a specialised regulatory umbrella governing virtual asset activities, comprising five core modules, including conduct of business, anti-money laundering and prudential requirements, and introduces a broader set of regulated activities to reflect the sector’s evolution.
Irina Heaver, a UAE-based crypto lawyer and Founder of NeosLegal, said the development reflects the country’s “multi-layered” regulatory structure, where different jurisdictions operate complementary regimes.
“The approach taken by the Capital Market Authority is structurally different,” she said, noting that as a federal regulator, its jurisdiction spans the entire UAE, extending traditional capital markets regulation into the virtual asset space through dedicated rulebooks.
“In practical terms, this introduces a credible federal licensing pathway for serious operators, complementing, rather than competing with, the existing regimes,” Heaver added, highlighting that market participants now have multiple regulatory routes depending on their business model and operational needs.
“The reality is that there is no one-size-fits-all solution. Each case may be better suited to CMA, VARA or ADGM depending on the business model, target market, and operational structure,” she added.
Heaver highlighted the uniqueness of the UAE’s regulatory systems. “The UAE is one of the few jurisdictions globally where regulatory plurality is not a gap, but a feature.”
Samer Mardini, Chief Investment Officer at a Dubai-based family office, described the framework as “a significant step” that brings virtual asset activities under a “complete and specialised regulatory regime” covering licensing, conduct, AML/CFT, trading systems and prudential oversight.
He pointed to the expansion of regulated activities from three to eight as a key development, saying it reflects a shift towards regulating the “full chain of virtual asset services, including dealing, custody, advice, portfolio management, and trading facilities”.
Mardini also highlighted the Alternative Trading System module as an “innovative” component, noting that it extends beyond virtual asset platforms to include conventional and tokenised securities trading facilities, helping connect digital assets with mainstream capital markets regulation.
Comparing frameworks, he said the CMA’s regime “is broader and applies at the federal level, while VARA and ADGM are limited to their own jurisdictions,” adding that it should be viewed as a “wider umbrella, not a replacement”.