UAE Crypto Licensing 2026: How CBUAE, VARA and DFSA Now Regulate Payment Tokens and Virtual Assets

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New UAE crypto licensing guide shows how CBUAE, VARA and DFSA now regulate payment tokens and recognised crypto assets.

The Central Bank of the UAE (CBUAE) now regulates payment tokens and stablecoins through its Payment Token Services Regulation (PTSR), prohibiting unlicensed payment-token activities across the UAE.
Dubai's Virtual Assets Regulatory Authority (VARA) and the federal Capital Market Authority (CMA) govern broader virtual asset service providers including exchanges, brokers and custodians.
The Dubai Financial Services Authority (DFSA) operates a Recognised Crypto Token regime in the DIFC, approving only three fiat tokens as of January 2026: USDC, EURC and RLUSD.
A 2026 founder-focused guide by NeosLegal outlines licensing pathways, minimum capital requirements, governance standards and AML/CFT obligations for each regulatory jurisdiction.
A November 2025 federal decree introduces a 60-day licensing window, risk-adjusted capital requirements and a one-year transition period ending September 2026 for legacy providers.
Firms operating across onshore UAE and free zones must overlay CBUAE payment-token prohibitions with VARA and CMA rules to avoid categorisation as unlicensed payment-token services.

Multi-Regulator Framework Reshapes Virtual Asset Licensing Landscape

The UAE's 2026 crypto licensing environment now operates under a multi-layered regulatory architecture spanning the Central Bank of the UAE (CBUAE), Dubai's Virtual Assets Regulatory Authority (VARA), the federal Capital Market Authority (CMA) and the Dubai Financial Services Authority (DFSA). Each regulator controls distinct licensing categories, with the CBUAE's Payment Token Services Regulation (PTSR) specifically targeting stablecoins and payment-like crypto instruments. Navigating this framework requires founders to separate pure virtual asset activities from payment-token services while ensuring compliance with AML and counter-terrorist-financing obligations across all jurisdictions.

A comprehensive 2026 guide released by NeosLegal maps the licensing pathways for virtual asset service providers, detailing application timelines, local-presence requirements and governance standards for each regulator. The guide emphasises that the UAE's approach prioritises robust compliance frameworks over light-touch registration, with minimum capital thresholds, fit-and-proper tests and ongoing reporting obligations embedded across all licensing categories. A November 2025 federal decree further consolidates oversight, introducing a 60-day licensing window for in-scope firms and a one-year transition period ending September 2026 for legacy providers to achieve compliance.

CBUAE Payment Token Regulation Imposes Federal Licensing Requirement

The CBUAE's Payment Token Services Regulation applies across the UAE, excluding DIFC and ADGM as separate financial free zones, but explicitly covering entities licensed by VARA in Dubai. Under the PTSR, a Payment Token includes stablecoins whose value references a fiat currency or other stablecoins denominated in that same fiat currency. The regulation creates three categories of Payment Token Services: issuance of payment tokens, custody and transfer of payment tokens, and conversion of payment tokens.

Any person carrying out Payment Token Services in the UAE or targeting UAE persons must obtain a licence or registration from the CBUAE. The regulation further restricts making payments in virtual assets unless the virtual asset is a payment token licensed by the CBUAE or otherwise explicitly permitted. According to analysis by TLP Advisors, the PTSR also prohibits services in virtual assets that are similar to Payment Tokens, catching pseudo-stablecoins or payment-style tokens even if not marketed as stablecoins.

The CBUAE holds power to designate any virtual asset as a means of payment, which would bring that asset explicitly within the payment-token perimeter and trigger licensing or prohibition. This restriction applies even to firms already licensed for other virtual asset activities by the CMA or VARA if they attempt to perform payment-like services with non-authorised tokens.

CMA and VARA Govern Broader Virtual Asset Activities

At the federal level outside DIFC and ADGM, the Capital Market Authority regulates most virtual asset activities, while VARA serves as Dubai's dedicated virtual assets regulator. The CMA Rulebook covers technology, cybersecurity and AML/CTF controls, with additional requirements on governance, fitness and propriety of controllers, and reporting. A CMA licence can allow licensed virtual asset service providers to service the entire UAE market, although they must still respect CBUAE prohibitions on unlicensed payment-token activities.

VARA sets licensing categories for exchanges, brokers, custodians and other VASP activities in Dubai onshore and across the emirate. NeosLegal's materials on UAE crypto law explain that founders must first select the appropriate jurisdiction, then map the exact activity to the applicable licence. Each regulator has its own capital requirements, fit-and-proper tests, systems and controls demands, and ongoing reporting standards aligned with international best practices.

DFSA Recognised Crypto Token Regime Controls DIFC Financial Services

Within the DIFC, the Dubai Financial Services Authority operates a distinct Recognised Crypto Token regime. Only DFSA-recognised tokens can be used in DFSA-regulated activities, subject to narrow exceptions, and firms cannot self-recognise tokens. The DFSA assesses tokens against criteria including transparency of purpose, governance and founders, market size and liquidity, regulatory status in other jurisdictions, technology robustness, and risk-mitigation measures on governance, cybersecurity, financial crime and legal risks.

Licensed firms in DIFC can provide a range of financial services with recognised crypto tokens: dealing in investments as principal or agent, arranging deals in investments, managing assets, advising on financial products, providing custody including staking where permitted, and operating clearing houses or multilateral trading facilities. According to Ocorian's analysis, DFSA's January 2026 final rules refine this regime, with DFSA retaining responsibility for assessing Fiat Crypto Tokens and recognising a fiat token only if it meets standards around stability, backing, governance, transparency and regulatory equivalence.

As of 12 January 2026, DFSA has recognised three fiat crypto tokens: Circle Euro Coin (EURC), Circle USD Coin (USDC) and Ripple USD (RLUSD). The final rules remove a prior requirement for firms to pay a 5,000 US dollar fee when applying for a Recognised Crypto Token, lowering a friction point for token recognition applications.

Federal Decree Introduces Licensing Window and Transition Period

A November 2025 federal decree law reshapes digital-asset rules and places much of the virtual asset ecosystem under coordinated oversight. The decree introduces a 60-day licensing window for in-scope firms, risk-adjusted capital requirements and a one-year transition period lasting through September 2026 for legacy providers to become compliant. It also extends regulation to areas such as virtual-asset payments, open-finance services and digital wallets.

The decree prioritises consumer protection via quicker dispute resolution up to 100,000 AED, stronger anti-fraud provisions and governance standards aligned with Islamic-finance principles. According to BitMarkets, these measures mean that by 2026, crypto businesses in the UAE must separate pure virtual-asset activities from payment-token services, ensuring that any stablecoin or fiat-referenced token activity fits within the CBUAE's PTSR framework.

Multi-Layered Architecture Demands Coordinated Licensing Strategy

Firms seeking to operate across onshore UAE and Dubai free zones must overlay CBUAE prohibitions with VARA and CMA rules, designing token structures and product offerings that avoid being categorised as unlicensed payment-token services while still meeting investor demand. Legal specialists emphasise that opportunity remains strong for exchanges, tokenisation projects and Web3 ventures, but only where licensing, governance and AML/CFT frameworks are built to meet this multi-layered regulatory architecture.

The NeosLegal guide stresses that DFSA's regime tightly controls which tokens can be used, while the CBUAE's PTSR controls what kinds of services can be provided with payment-type tokens, and the CMA and VARA cover broader virtual asset activities. No person is permitted to issue or provide services related to payment tokens within the UAE without CBUAE authorisation, and this blanket restriction applies equally to entities regulated by CMA or a local licensing authority like VARA.