UAE Law and Practice Contributed by: Stefan Mrozinski, Gabrielle Margerison (nee Lowe) and Arnold Krutilins, White & Case LLP
Large Value Payment Systems Regulation This framework sets out the conditions for obtaining and maintaining a licence to operate a large value payment system, defined as “a clearing and settlement system that is designed primarily to process large value and/or whole- sale payments typically among financial market participants (so-called wholesale payments) or involving money market, foreign exchange or many commercial transactions, excluding bilat- eral clearing and settlement arrangements and relationships which do not constitute a ‘system’” . Retail Payment Systems Regulation This framework applies to designated retail pay - ment systems providers, setting out (amongst other things): • the CBUAE’s key criteria for designating a retail payment service; • the licensing and designation process for retail payment services; and • the ongoing requirements of designated retail payment services. Retail Payment Services and Card Schemes Regulation (the “RPSCS Regulation” ) This framework applies to retail payment ser - vice providers and card scheme providers, set - ting out the conditions applicable to the granting and maintaining of licences to carry out retail payment services and card schemes in “onshore UAE” , the ongoing obligations of retail pay - ment service and card scheme providers and the powers of the CBUAE with respect to the supervision of retail payment service providers and the ongoing reporting requirements for card schemes. “Onshore UAE” Virtual Assets In “onshore UAE” , virtual assets fall under the jurisdiction of the SCA, the VARA and the CBUAE.
The SCA The SCA is responsible for overseeing the regu - lation of virtual assets and related services pur - suant to Cabinet Decision No 111/2022 (the “VA Decision” ). According to the VA Decision, any person that wishes to carry out virtual asset- related activities must obtain a licence from the SCA (or the competent authority at the emirate level (where one exists)). In July 2024, the SCA issued its guidelines relating to the Regulation of Virtual Assets and Virtual Assets Service Pro - viders. The VARA The VARA is the authority responsible for regu - lating, supervising and overseeing virtual assets and related activities in the emirate of Dubai (excluding the DIFC), in line with the Dubai Vir - tual Assets Law (the “DVAL” ) and its Executive Regulations and Rulebooks. In 2023, the DVAL rolled out its comprehensive virtual asset licens - ing framework and a number of global market players obtained full operational licences. The CBUAE The CBUAE is responsible for regulating activi - ties relating to payment tokens (ie, stablecoins) pursuant to the RPSCS Regulation, while the CBUAE’s Stored Value Facilities Regulation (the “SVF Regulation” ) regulates crypto and virtual assets insofar as they may be accepted in exchange for the storage of value. In June 2024, the CBUAE published the PTS Regulation which established a comprehensive framework for licensing and supervising digital payment services. It covers: • payment token issuance; • payment token conversion; and • payment token custody and transfer. “Offshore UAE” Virtual Assets and Payment Services
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