Scaling digital asset businesses in the UAE: A balanced guide to ADGM, DIFC, and VARA

As digital asset firms seek more established regulatory environments, the United Arab Emirates (UAE) continues to position itself as a global hub for blockchain, tokenisation, and institutional Web3 innovation. This means it’s worth understanding what the right entry point is to start and develop digital business operations.

With a clear vision to lead in digital finance, the UAE offers three primary regulatory zones: Abu Dhabi Global Market (ADGM), Dubai International Financial Centre (DIFC), and the mainland Dubai regime under the Virtual Assets Regulatory Authority (VARA).

Each of these jurisdictions offers distinct strengths – and limitations – depending on your firm’s activities, products, and client base.

Key market challenges

Interoperability and client education

There’s a need for greater legal and regulatory interoperability. Firms are currently grappling with real-world challenges when it comes to aligning business models with varying definitions and compliance expectations globally. The lack of coordination and knowledge between clients, fund managers, and infrastructure providers continues to slow down progress. Those entering this space must not only navigate technical integration, but also regulatory alignment across jurisdictions. Having a more collaborative approach between firms and regulators can help to eliminate this. 

Regulatory clarity

There’s an absence of a common language in digital asset regulation, which is very apparent globally as well as within the UAE. The FATF’s focus on defining virtual assets has had a positive impact with many jurisdictions adopting this approach, giving firms a level of comfort and predictability. Global standard-setting bodies like the FSB, OECD, and IOSCO are now focusing their efforts on a uniform definition stablecoins, a critical next step in fostering international cooperation. These developments are vital, especially for firms looking to expand regionally or globally.

The UAE is focussed is on digitisation, AI development, and being the global leader to overcome these challenges. This has been cemented by the Digital Economy 2031 strategy, and number of AI, fintech and digital focussed events hosted in the UAE year on year.

Three jurisdictions, three approaches to digital asset regulation

1. Abu Dhabi Global Market (ADGM) – Institutional-grade with full-spectrum coverage

Regulated by the Financial Services Regulatory Authority (FSRA), the ADGM offers a Virtual Asset Framework (established in 2018) that encompasses a wide range of digital asset activities. It supports:

• Trading venues and brokerages (including OTC)
• Digital custody
• Lending and staking services
• Tokenisation of securities and fund units
• Asset management, including crypto-related funds
• Certain derivative activities.

The ADGM’s framework is grounded in traditional financial regulation, adapted to digital asset risks, and is attractive to firms offering infrastructure, asset management, staking, trading, and tokenisation services.

2. Dubai International Financial Centre (DIFC) – Controlled innovation for recognised tokens

Within the DIFC, the Dubai Financial Services Authority (DFSA) has launched a Crypto Token Regime that permits activities in a restricted set of recognised tokens (e.g., Bitcoin and Ethereum). The DFSA has also launched its Innovation Testing Licence (ITL) programme. This is a licensed sandbox that allows firms to apply to test innovation products and services in a controlled environment. It provides firms with an opportunity to test tokenised financial solutions, offering a regulatory pathway from experimentation to full authorisation. 

3. VARA (mainland Dubai) – Evolving scope

The Virtual Assets Regulatory Authority (VARA) governs digital asset activity in mainland Dubai. Its framework targets high-volume, retail-oriented platforms and Web3 innovation. It supports activities such as:

• Retail crypto exchange services
• Brokerage and custodial services
• NFT platforms and metaverse ecosystems
• Web3 and consumer-facing DeFi apps.

While VARA is advancing quickly, the regulatory model is still evolving.

Which jurisdiction matches your business model?

The UAE’s tiered regulatory landscape allows you to align your setup with strategic objectives, product depth, and client focus.

Target client alignment: Who are you serving?

Choosing the right jurisdiction: Key considerations

• Regulatory scope: The ADGM currently has the most comprehensive framework for institutional financial products and services, while the DIFC remains cautious and focused on established assets. VARA is progressing, but its current focus is on consumer and retail platforms.
• Client alignment: Firms focused on institutional, trading, custody, and structured products may benefit from a presence in the ADGM or the DIFC, while NFT and consumer dApps are better suited to mainland Dubai under VARA.
• Market Positioning: The DIFC has strong brand equity in global financial services, particularly with private capital and family offices, while the ADGM offers proximity to sovereign wealth and government-linked investors. VARA’s appeal lies in its position at the intersection of innovation, lifestyle, and Web3 retail experiences.

A growing, diversified opportunity

The UAE’s regulatory landscape isn’t monolithic. It’s multi-layered, pragmatic, and designed to serve a wide spectrum of digital asset activity, from institutional custody and tokenised investment products to retail exchanges and NFT platforms.

For blockchain and digital asset firms with complex, cross-border models, the UAE offers more than just favourable regulation – it provides a platform to scale in a region with global capital access, ambitious infrastructure development, and regulatory transparency.

Rather than a one-size-fits-all decision, firms should consider the UAE as a portfolio of jurisdictions, each serving different aspects of the digital asset lifecycle. The right entry point depends on your current offering, target market, and long-term growth vision.

How can Ocorian help you establish a digital asset business in the UAE?

Interested in expanding into the UAE? Start by mapping your business activities and client segments to the most suitable regulatory jurisdiction and get in touch for regulatory support to scope your operating model and support you through the regulatory licensing process.

From the initial concept and engaging in conversations with regulatory bodies to preparing and finalising the formal application forms, we can support you at every step of the process as you look to set up a presence in the DIFC and ADGM.