Before Markets in Crypto-Assets Regulation (“MiCA”), firms entering Europe faced rules that varied from country to country.
Registration regimes differed, regulatory expectations were not always aligned, and each new market often meant a separate conversation with a separate authority.
MiCA regulation was designed to protect users of crypto-assets, support financial stability, and keep crypto-asset markets fair and orderly where existing European Union (“EU”) financial services legislation did not apply.
With a single framework in place, an authorisation granted in one member state can support activity across the EU, which gives firms a more consistent basis for planning. It also gives the investors, banks, and partners dealing with these firms a clearer picture of what to expect. Compared with the fragmented environment that preceded MiCA, the regulatory landscape is now easier to understand, and easier to build a business around.
For virtual asset firms that have made progress under the MiCA regulation, the question is now whether their existing position gives them a sound basis for growth elsewhere.
Why Dubai enters the conversation
For firms assessing markets beyond Europe, Dubai may warrant consideration. The United Arab Emirates has established a dedicated regulatory framework for virtual assets, while Dubai has developed a specific regime for activities within the remit of the Virtual Assets Regulatory Authority (“VARA”).
VARA oversees virtual asset activities across Dubai, excluding the Dubai International Financial Centre (“DIFC”). Its regulatory framework covers activities such as exchange services, custody, broker-dealer services, investment management, and transfer and settlement services. The permissions required depend on the activities a firm intends to conduct.
For a virtual asset firm, the relevant question is whether Dubai supports a defined commercial objective. This might involve serving clients in the region, establishing relationships with local business partners, or offering services to a client base that the firm cannot adequately reach through its existing operations.
A regulatory route to market is only one part of that assessment. Firms also need to consider the demand for their services, the requirements for operating locally and the resources needed to support clients. The rationale for entering Dubai will differ according to the firm's size, services, and existing international presence.
One international strategy, separate regulatory requirements
MiCA and VARA apply to different regions and operate under separate regulatory regimes and authorisation under MiCA does not give access to the Middle East. Firms must assess the requirements that apply to their intended activities in each market.
For businesses considering both Europe and the UAE, this has practical implications. They need to understand how separate regulatory obligations will affect their governance, compliance processes, technology and day-to-day operations. They must also determine whether their existing resources can support activity in another jurisdiction or whether additional local expertise and infrastructure will be required.
These considerations should form part of the commercial decision from the outset. Entering a new market may create opportunities to reach different clients, but the value of that access depends on the firm's ability to serve those clients and sustain its operations.
The aim is to establish a coherent international strategy in which each market has a clear purpose. For some firms, that may mean building on an established European presence. For others, Dubai may offer a relevant opportunity. The decision should follow from the business case, not from the availability of a licensing route alone.
Is Dubai the right next step?
MiCA has established a common regulatory basis for eligible crypto-asset service providers operating across the EU. For firms that have secured MiCA authorisation, attention can now turn to the commercial decisions that follow: which clients to serve, which services to offer, and where to establish a presence.
Dubai may be a suitable next step for firms whose objectives align with its market and regulatory requirements. For others, a different market or a stronger focus on existing operations may be more appropriate.
The starting point is a clear assessment of the opportunity, the applicable regulatory requirements and the resources needed to support it.
Download our guide, From MiCA to VARA: is a Dubai licence your next step?, to explore whether Dubai should be part of your firm's international plans.
