UAE allows Central Bank-licensed financial institutions to enter virtual asset market

Under Resolution No. 16 of 2026, issued by the UAE’s Capital Market Authority (CMA), CBUAE-licensed entities are now permitted to conduct activities covered by the CMA’s Resolution No. 4 of 2026, which governs virtual asset service providers (VASPs) and alternative trading system operators. Insurance companies are the sole exception.

Marie Chowdhry, a financial regulation expert at Pinsent Masons in the UAE, said: “Until now, a CBUAE- licensed entity that wanted to offer virtual asset services generally needed two entities – one licensed by the CBUAE for its traditional finance activities, and one licensed by the CMA for its virtual asset business – and an operating model built to let the two work together, including arrangements for how funds moved between them.”

“That meant two sets of capital requirements, two governance structures, and a flow of funds designed around a regulatory boundary rather than around the customer. In principle, the resolution makes it possible for one entity to do both, which would take real cost and complexity out of future operating models,” she said.

However, the resolution does not set out how the mechanism will work in practice. It does not go into the details of how authorisation, governance and supervision would function with the same entity in place.

The regulatory change broadens the UAE’s digital asset sector by allowing banks and other licensed firms to carry out services that previously could only be provided by firms licensed directly under the CMA’s virtual asset framework. Depending on their business models, these institutions may be able to provide services linked to the trading, custody and operation of virtual asset platforms, subject to applicable regulatory requirements.

Jessa White, a digital assets expert at Pinsent Masons in the UAE, said: “The resolution is a clear signal that the UAE intends for regulated financial institutions – so-called ‘TradFi’ firms – to be part of its virtual asset market rather than sit alongside it.”

“The resolution also strengthens regulatory coordination between the UAE’s financial authorities. By enabling CBUAE licensed financial institutions to carry out CMA-regulated virtual asset activities, the change reduces barriers between TradFi and DeFi – decentralised financial firms – while maintaining oversight through the existing licensing framework,” she said.