Dubai’s VARA Issues Token Issuance Guidance, Defining Three Risk-Based Categories

Overview

• VARA released interpretative guidance that explains how token issuers should structure, disclose, and distribute virtual assets under Dubai’s existing rulebook.
• Three issuance paths now apply: fiat- and asset-referenced tokens such as stablecoins sit in Category 1, offerings that must go through licensed intermediaries fall under Category 2, and low‑functionality tokens are exempt in a separate group.
• Stablecoins and other asset‑referenced tokens face clear expectations on reserve backing, investor redemption rights, and legal structuring to reduce the risk of frozen funds or unclear claims.
• For Category 2 offerings, VARA assigns due‑diligence and ongoing compliance duties to VARA‑licensed distributors, which means broker‑dealers and exchanges must vet tokens before listing and monitor them after launch.
• VARA says this is guidance rather than new law, aims to improve disclosures so users can make informed choices, and follows a March expansion of Dubai’s derivatives rulebook as the emirate builds a licensed, risk‑aware crypto market.