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  • Part I – Approval Requirements

    • A. Interpretation

      1.
             		 Fiat-Referenced Virtual Asset [FRVA] means a type of Virtual Asset that purports to maintain a stable value in relation to the value of one or more fiat currencies but does not have legal tender status in any jurisdiction. An FRVA is neither issued nor guaranteed by any jurisdiction and fulfils its functions only by use and acceptance within the community of users of the FRVA.
      2. As stated in Rule I.B.3 of these FRVA Rules, the issuance of any FRVA that purports to maintain a stable value in relation to the value of AED shall not be approved under these FRVA Rules and shall remain under the sole and exclusive regulatory purview of the CBUAE.
      3.
             		 FRVAs do not include Virtual Assets which are—
       
        a. representations of any equity claim;
        b. issued by central banks acting in their monetary authority capacity [e.g. central bank digital currencies [CBDCs]]; or
        c.
             		 tokenised bank deposits used only for interbank settlement purposes.
       
      4.
             		 Reference Currency means, in relation to an FRVA, a VARA-approved fiat currency—
       
        a. the value of which an FRVA purports to maintain a stable reference to;
        b. which is controlled by a central bank of any country[ies] or territory[ies] which are not subject to any sanctions in accordance with Federal AML-CFT Laws;
        c. which has the status of legal tender; and
        d.
             		 which is required to be accepted within a given jurisdiction.
       
      4.
             		 Reserve Assets means, for the purposes of these FRVA Rules, the pool of assets maintained in accordance with Rule III.B of these FRVA Rules and as approved by VARA. Reserve Assets are not Client Money or Client VAs, as defined in the Compliance and Risk Management Rulebook.
       

    • B. General requirements for VARA approval

      1.
             		 As stated in Rule I.C.1 of the VA Issuance Rulebook, the issuance of an FRVA is a Category 1 VA issuance and as such is a VA Activity. In addition to compliance with these FRVA Rules, and all other Regulations, Rules and Directives as communicated by VARA in its Licence or otherwise from time to time, any Entity seeking to carry out the issuance of an FRVA will be required to comply with the following Rulebooks—
       
        a. Company Rulebook;
        b. Compliance and Risk Management Rulebook;
        c. Technology and Information Rulebook;
        d. Market Conduct Rulebook; and
        e. VA Issuance Rulebook.
       
      2.
             		 Approval conditions. VARA may, in its sole and absolute discretion, impose conditions on any approvals granted for the issuance of an FRVA by a VASP including, but not limited to—
       
        a.
             		 segregation of an Entity’s business or operations in relation to VA issuances and VA Activities [or other similar businesses and activities, if applicable] by implementing and strictly enforcing policies and procedures;
        b.
             		 provision of further information to demonstrate the VASP’s ability to comply with any Regulation, Rule or Directive; and/or
        c.
             		 any additions or modifications to requirements set out in any Regulation, Rule and/or Directive.
       
      3.
             		 AED as Reference Currency. In addition to Regulation III.A.4, the issuance of any Virtual Asset that purports to maintain a stable value in relation to the value of AED shall remain under the sole and exclusive regulatory purview of the CBUAE. Entities seeking to issue any such Virtual Asset in the Emirate must comply with any applicable CBUAE regulation.
       
      4.
             		 Currencies of sanctioned countries or territories. VASPs may not have as a Reference Currency any currency issued by any country[ies] or territory[ies] which are subject to sanctions under Federal AML-CFT Laws.
       

    • C. Significant FRVA Issuers

      1.
             		 VARA may, in its sole and absolute discretion, designate any VASP Licensed to issue an FRVA as a Significant FRVA Issuer at the time of issuing a Licence or anytime thereafter.
      2.
             		 In designating a VASP as a Significant FRVA Issuer, VARA may consider all factors relevant to the VASP and/or the FRVA issued by the VASP, including but not limited to—
       
        a. the number of holders of the FRVA;
        b. the value of circulating and/or outstanding supply of the FRVA;
        c. the value of the Reserve Assets maintained by the VASP;
        d. the number and value of transactions in the FRVA;
        e.
             		 whether the VASP and/or its affiliates carry out any other VA Activity[ies] and/or financial services in the Emirate, or provide services similar to VA Activities and/or financial services in other jurisdictions;
        f. interconnectedness with licensed financial institutions and/or VASPs; and/or
        g.
             		 the business, structural and operational complexity of the VASP in relation to the FRVA issued by it.
       
      3.
             		 VARA may, in its sole and absolute discretion, impose any Rules on a Significant FRVA Issuer in addition to those contained in the Rulebooks, which may include, but not be limited to, additional Rules on—
       
        a. company structure and corporate governance;
        b. Paid-Up Capital, Net Liquid Assets, Insurance and/or Reserve Assets;
        c. audits, regulatory reporting and regulatory notifications; and/or
        d.
             		 any other matter as VARA deems appropriate.