VARA Licensing Progress: 23 Entities and Growing

VARA Licensing Landscape

Dubai’s Virtual Assets Regulatory Authority (VARA) has licensed 23 entities across various virtual asset activity categories as of early 2026, establishing the regulatory foundation for commodity token trading, custody, and advisory services in Dubai. This licensing progress represents a significant maturation of the UAE’s digital asset regulatory framework, with direct implications for gold token platforms, oil tokenization projects, and Islamic commodity finance structures.

VARA was established under Dubai Law No. 4 of 2022 — the Dubai Virtual Assets Regulation Law — and has moved from initial framework publication to active licensing and supervision in approximately three years. This pace compares favorably with other jurisdictions: the EU’s MiCA framework required years of legislative process before implementation, and Singapore’s Payment Services Act licensing took over two years to process initial applications.

Licensed Entity Composition

The 23 VARA-licensed entities span multiple activity categories relevant to commodity tokenization:

Exchange Operators. Licensed platforms for trading commodity tokens including XAUT and PAXG, offering UAE-accessible trading pairs with fiat and cryptocurrency settlement. Major international exchanges that have obtained VARA licensing provide deep liquidity for gold token trading, connecting UAE investors to global commodity token markets. These platforms must maintain fair and orderly markets, implement surveillance systems, and comply with VARA’s market conduct rules.

Custody Providers. Licensed entities that hold commodity tokens on behalf of institutional and retail clients, maintaining segregated storage, institutional-grade key management, and insurance coverage. Custody licensing requires robust cybersecurity infrastructure, penetration testing, and incident response procedures. For gold token custody specifically, providers must address both the digital custody of the token and coordinate with physical custody of the underlying LBMA Good Delivery gold.

Broker-Dealers. Licensed intermediaries that facilitate commodity token transactions, routing client orders to exchanges and managing execution quality. Broker-dealers serve clients who want commodity token exposure without managing direct exchange relationships or digital wallet infrastructure.

Advisory Firms. Licensed entities that provide investment advice on commodity token allocation, portfolio construction, and risk management for digital commodity exposure. Advisory licensing requires demonstrated expertise in digital asset markets and conflicts-of-interest management.

Transfer and Settlement Services. Licensed entities that facilitate commodity token transfers, including cross-border movements of gold tokens and fiat-to-token conversion services.

VA Issuance. Entities licensed to issue new virtual assets, including commodity-backed tokens. This category is directly relevant to potential UAE-issued gold tokens backed by DMCC-refined and vaulted gold.

The activity-based licensing model allows entities to hold licenses for specific activities rather than requiring a single comprehensive license, enabling specialized commodity token operators to enter the market with targeted authorization.

Licensing Process and Timeline

The VARA licensing process involves multiple stages, each designed to assess the applicant’s readiness for regulated virtual asset operations:

Stage 1: Initial Application. Entities submit a comprehensive application including business plans, governance documentation, ownership structure, management team qualifications, and financial resources. VARA’s initial review assesses whether the applicant meets threshold requirements for further evaluation.

Stage 2: Due Diligence. VARA conducts detailed due diligence on the applicant’s beneficial ownership, management team backgrounds, regulatory track record, and financial condition. This stage includes verification of source of funds for any capital commitments.

Stage 3: Technical Assessment. The applicant’s technology infrastructure — trading platform, custody systems, cybersecurity controls, and compliance tools — is evaluated against VARA’s technical requirements. For exchange operators, this includes matching engine performance, order management capability, and market surveillance systems.

Stage 4: Operational Readiness. A pre-launch assessment confirms that the applicant has implemented all required policies, procedures, and controls, including AML/CFT programs, customer protection measures, and business continuity plans.

Stage 5: License Issuance. Upon satisfying all requirements, VARA issues the license with any conditions or restrictions appropriate to the entity’s activities and risk profile.

The entire process typically takes six to twelve months from initial application to final license issuance, though the timeline varies based on application complexity and VARA’s processing capacity. The VARA license application guide provides a step-by-step walkthrough for prospective applicants.

Growth Trajectory

The trajectory from initial licensing to 23 entities indicates regulatory momentum and market demand. Each new license requires comprehensive review, and the sustained pace of licensing reflects both VARA’s capacity building and the attractiveness of Dubai as a regulated commodity token market.

Projections suggest VARA licensing could reach 50 or more entities by 2027, with increasing specialization in commodity-specific digital asset services. Growth drivers include:

• International exchanges seeking UAE market access for commodity token trading
• UAE-based commodity trading firms expanding into digital asset operations
• Custody providers establishing dedicated commodity token safekeeping services
• Advisory firms specializing in institutional commodity token allocation
• Token issuers exploring UAE-originated gold tokens backed by DMCC gold

Commodity Token Market Implications

Market Infrastructure Depth

Twenty-three licensed entities provide baseline market infrastructure for commodity token operations. However, the market requires additional depth in several areas to support institutional-scale commodity tokenization:

Commodity-Specific Custody. Dedicated custodians specializing in gold token and commodity token safekeeping, with expertise in the dual digital-physical custody model that commodity tokens require.

Islamic Commodity Platforms. VARA-licensed platforms offering Shariah-compliant commodity token trading environments, with Shariah governance oversight and compliance with AAOIFI standards.

Institutional Trading Venues. Deep-liquidity platforms serving ADGM-regulated institutional investors, with block trading capabilities, prime brokerage services, and settlement finality guarantees.

Fiat On/Off Ramps. Efficient AED-to-commodity token conversion services, enabling UAE-based investors to enter and exit commodity token positions without routing through international cryptocurrency exchanges.

Regulatory Clarity

The licensing process itself provides regulatory clarity for the broader market. Each licensed entity has received explicit VARA approval for its specific commodity-related activities, creating precedent that informs subsequent applicants and reduces regulatory uncertainty for the industry.

Competitive Positioning

The 23 licensed entities position Dubai competitively against other jurisdictions seeking to attract commodity token operators. Switzerland (FINMA-regulated), Singapore (MAS-regulated), and the UK (FCA-registered) offer alternative regulatory frameworks, but VARA’s specific focus on virtual assets — combined with Dubai’s physical commodity trading infrastructure through DMCC and DGCX — creates a differentiated proposition that no other jurisdiction matches.

ADGM Complementarity

VARA licensing complements ADGM’s regulatory framework in Abu Dhabi, creating the UAE’s characteristic dual-regulator system for digital assets. The VARA vs ADGM commodity regulation comparison examines how entities choose between jurisdictions based on their operational model, target client base, and product focus.

Entities may choose VARA for consumer-facing commodity token operations (leveraging Dubai’s retail market and tourism economy) and ADGM for institutional activities (leveraging Abu Dhabi’s sovereign wealth fund ecosystem and institutional investor base). Dual licensing across both jurisdictions provides maximum market coverage but requires navigating two distinct regulatory frameworks.

Outlook

The VARA licensing trajectory supports a growing commodity token ecosystem in Dubai. As more entities receive licenses, the infrastructure for gold token trading, oil tokenization support, Islamic commodity finance, and traditional asset digitization deepens.

The Emirates NBD digital asset strategy brief and RWA.xyz commodity data insights provide additional context on institutional adoption trends that will drive future VARA licensing demand.

For ongoing tracking, see our Commodity Tokenization Metrics Dashboard and Gold Token Market Tracker.

Enforcement and Supervision

VARA’s regulatory effectiveness depends not only on licensing but on ongoing supervision and enforcement:

Supervisory Approach. VARA conducts regular examinations of licensed entities, including on-site inspections, document reviews, and technology assessments. The supervisory frequency depends on the entity’s risk profile, with exchange operators and custody providers subject to more frequent oversight than advisory firms.

Enforcement Actions. VARA has the authority to impose sanctions ranging from warnings and fines to license suspension and revocation. Published enforcement actions provide market discipline and regulatory credibility, signaling to both licensed entities and prospective applicants that compliance standards are enforced.

Cross-Jurisdictional Cooperation. VARA coordinates with international regulators for entities operating across multiple jurisdictions. This cooperation is essential for commodity token operations where the token issuer (Tether in Switzerland, Paxos in New York), the exchange operator (VARA-licensed in Dubai), and the investors may each be in different regulatory jurisdictions.

Consumer Protection. VARA’s consumer protection requirements include clear risk disclosures, segregated client assets, complaints handling procedures, and marketing standards. These protections are particularly important for gold token products marketed to retail investors who may not be familiar with blockchain technology risks.

The VARA vs ADGM comparison examines how VARA’s supervisory approach differs from ADGM’s institutional-focused oversight, and the VARA license application guide addresses compliance requirements in the context of the licensing process.