The VARA (Virtual Asset Regulatory Authority) in Dubai offers several types of licenses to accommodate various activities related to virtual assets and cryptocurrencies. Here’s a summary of the primary license types issued by VARA:
- Advisory Services License
This license is for entities that provide advice related to virtual assets. These services include consulting on investment strategies, risk management, and compliance issues pertaining to virtual assets.
- Broker-Dealer Services License
Entities holding this license can facilitate the buying, selling, and trading of virtual assets on behalf of others. This includes executing trades, providing brokerage services, and acting as an intermediary in transactions.
- Custody Services License
This license is for companies that offer custody solutions for virtual assets. Custodians are responsible for holding and safeguarding virtual assets on behalf of their clients, ensuring security and compliance with regulatory standards.
- Exchange Services License
Licensed exchanges can operate platforms that allow the trading of virtual assets. These platforms can support trading between different types of virtual assets or between virtual assets and fiat currencies.
- Lending and Borrowing Services License
This license allows entities to offer lending and borrowing services involving virtual assets. Companies with this license can facilitate loans where virtual assets are used as collateral or are being lent directly.
- Payment and Remittance Services License
Holders of this license can provide payment services involving virtual assets. This includes processing payments and facilitating remittances using virtual assets as a medium of exchange.
- Proprietary Trading License
Entities with this license are permitted to trade virtual assets on their own account. This is typically for firms that engage in trading virtual assets for their own profit rather than on behalf of clients.
- Virtual Asset Management Services License
This license is designed for entities that manage portfolios of virtual assets on behalf of clients. This includes investment management and advisory services related to virtual asset funds and portfolios.
- Virtual Asset Investment Fund License
Holders of this license can operate investment funds that pool capital from multiple investors to invest in virtual assets. These funds can invest in a diversified portfolio of virtual assets to spread risk and maximize returns.
- Market Maker Services License
Licensed market makers provide liquidity to virtual asset markets by being ready to buy and sell assets continuously at publicly quoted prices. This helps in maintaining liquidity and reducing volatility in the market.
Each of these licenses is designed to regulate specific activities within the virtual asset ecosystem, ensuring a structured and compliant environment for the growth of the virtual asset industry in Dubai. Entities interested in obtaining any of these licenses must meet specific requirements set by VARA, including compliance with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations, among other criteria.
Finbler – A UAE based advisory firm provides extensive support and services in VARA licensing application process. For more details, please contact at info@finbler.com or visit us at https://finbler.com/
Written by: Muhammad Rashid, Co-Founder & CEO.
