Dubai’s Virtual Assets Regulatory Authority (VARA) released detailed guidance on token issuance, specifying how stablecoins, real-world asset (RWA) tokens, and other digital assets should be structured, disclosed, and distributed. The guidance interprets VARA’s existing Virtual Asset Issuance Rulebook, establishing three distinct issuance categories rather than creating new law.
Three Issuance Pathways
Category 1 covers fiat- and asset referenced tokens, Category 2 requires distribution through VARA-licensed intermediaries, and exempt virtual assets with limited functionality fall under Category 3. Licensed distributors in Category 2 are responsible for due diligence and ongoing compliance validation.
Enhanced Transparency and Governance
Ruben Bombardi, VARA general counsel, emphasized that the bespoke framework offers clearer regulatory guidance compared with traditional securities or payments law. The guidance mandates detailed disclosures, including whitepapers and separate risk statements, to support informed decision-making for investors and users.
VARA’s framework focuses on clarity for market participants in Dubai, while incorporating expectations for reserve assets, redemption rights, and legal structuring for asset-referenced tokens. Bombardi noted the approach may also attract interest from foreign regulators and standard setters, highlighting Dubai’s goal of establishing a specialized, globally recognized virtual asset issuance regime.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.