Can I Issue a Token in Dubai? A Practical Guide Under VARA

If you are planning a token launch in Dubai, the first question is usually framed too simply:

“Can I issue a token in Dubai?”

The better question is:

“What kind of token am I issuing, where does it fall under the VARA framework, and what must I do before I issue it?”

That distinction matters because, under VARA, token issuance is not governed by one universal rule. Dubai’s framework separates token issuance into different categories with different consequences. Under the current VA Issuance Rulebook, issuances in the Emirate are categorized as Category 1, Category 2, or Exempt VAs, and the prior requirement depends on which category applies. Category 1 requires a VARA Licence; Category 2 does not require a VARA licence but must use a Licensed Distributor for all placement or distribution; and Exempt VAs may be issued without prior approval, subject to ongoing compliance with the rulebook.

That means the right answer is not:

“Yes, you can issue a token in Dubai.”

It is:

“Yes, but only if you first classify the token correctly and follow the pathway that applies to that category.”

This guide explains how the framework works in practice for founders, exchanges, projects, and token issuers searching for:

• issue a token in Dubai
• VARA token issuance
• token issuance Dubai
• Can I issue a token in Dubai
• Category 1 VA issuance
• Category 2 VA issuance
• Exempt VA
• Dubai token regulation
• crypto token launch Dubai
• VARA whitepaper requirements

1) The starting point: token issuance is regulated in Dubai

The most important place to start is that token issuance is expressly inside the VARA framework.

The VA Issuance Rulebook says it includes requirements that all Entities in the Emirate wishing to issue a Virtual Asset must follow. The Regulations also state that any entity in the Emirate that issues a Virtual Asset in the course of business must comply with the VA Issuance Rulebook.

That means a token launch in Dubai is not something you should approach as:

• a general marketing exercise,
• a product launch with legal cleanup later,
• or a pure technology event.

It is a regulated event under a framework that asks, first of all, what kind of VA issuance this is.

So the answer to “Can I issue a token in Dubai?” is not a blanket yes or no. It depends on:

• the token category,
• the underlying rights or references,
• the business model associated with the token,
• and the way the token will be placed or distributed. The 2025 VA Issuance Rulebook specifically notes that classification depends on the token’s characteristics and the underlying business model, and if a token changes such that it no longer fits its original category, the issuer must meet the requirements of the new category before the change takes effect.

That is why token classification comes before everything else.

2) The three main issuance pathways under VARA

Under Rule I.C of the VA Issuance Rulebook, issuances in the Emirate are divided into three buckets:

• Category 1
• Category 2
• Exempt VAs.

Category 1

Category 1 covers the issuance of:

• Fiat-Referenced Virtual Assets (FRVAs)
• Asset-Referenced Virtual Assets (ARVAs)
• and other VAs that VARA may determine from time to time. The prior requirement for Category 1 is a VARA Licence.

Category 2

Category 2 covers the issuance of any Virtual Asset that is not:

• a Category 1 VA Issuance, and
• not an Exempt VA. Under the current rulebook, a Category 2 issuance does not require a VARA Licence or prior approval, provided that all placement and distribution is carried out by a Licensed Distributor. The Licensed Distributor assumes responsibility for validating that the issuer complies with the VA Issuance Rulebook.

Exempt VAs

Exempt VAs may be issued without prior approval from VARA, but issuers must comply with Part II of the VA Issuance Rulebook at all times, and remain subject to VARA supervision, examination, and enforcement.

That three-part structure is the core of the practical analysis.
Before asking how to issue a token in Dubai, you need to know which of these three paths you are on.

3) Category 1: when a token launch becomes a licensed VA Activity

Category 1 is the most heavily regulated token issuance route.

The rulebook states plainly that no entity in the Emirate may carry out any Category 1 VA Issuance unless it is authorized and Licensed by VARA for that issuance. It also states that Category 1 issuance is itself a VA Activity.

That matters because once your token falls into Category 1, you are no longer dealing with a lighter issuance pathway. You are dealing with the same full licensing logic that applies to other regulated VA Activities.

The rulebook says entities seeking to carry out Category 1 issuance must comply not only with the VA Issuance Rulebook, but also with the:

• Company Rulebook
• Compliance and Risk Management Rulebook
• Technology and Information Rulebook
• Market Conduct Rulebook.

So for a founder, the practical takeaway is this:

If your token is an FRVA or ARVA, or otherwise falls into Category 1, this is not a simple “token launch” process. It is a full regulated licence application with all the institutional expectations that come with becoming a VASP.

VARA’s public fee schedule also confirms that Category 1 VA Issuance sits in the higher licence-fee band:

• AED 100,000 licence application fee
• AED 200,000 annual supervision fee. VARA may also impose a separate fee for applications by prospective issuers for approval to issue a Virtual Asset and/or for Category 1 whitepaper submissions.

That is one of the clearest signs that Category 1 issuance is treated as a serious regulated business line rather than a light token-filing exercise.

4) FRVAs and ARVAs: the most sensitive token categories

The two best-known Category 1 classes are:

• Fiat-Referenced Virtual Assets (FRVAs)
• Asset-Referenced Virtual Assets (ARVAs).

The 2025 VA Issuance Rulebook makes clear that:

• entities seeking to issue an FRVA must comply with the FRVA Rules in the issuance rulebook annex,
• entities seeking to issue an ARVA must comply with the ARVA Rules in the corresponding annex.

It also says that each FRVA and each ARVA must receive approval from VARA before issuance, even after the issuer has been licensed for Category 1 issuance. In other words, the licence is not the only step. The individual instrument also requires approval.

That is a very important point.

A lot of founders assume that if they secure the Category 1 licence, they can then issue any stablecoin-style or asset-referenced product under that umbrella.

The rulebook does not work that way.
For FRVAs and ARVAs, each token issuance itself requires prior approval from VARA, and VARA may impose conditions on those approvals.

So if your project resembles:

• a stablecoin,
• a fiat-backed token,
• a reserve-backed token,
• or a token referencing real-world or other assets,

you should assume the Category 1 path is likely to be central to the analysis.

5) Category 2: the route most founders think they are on

Category 2 is where many startup-style token projects will begin their analysis.

Under the current VA Issuance Rulebook, Category 2 covers any issuance that is not Category 1 and not Exempt. The rulebook says entities in the Emirate may issue Category 2 VAs only if all placement and distribution is carried out by a Licensed Distributor, and if that condition is met, the issuer does not need prior approval from VARA. It also says that Category 2 tokens are not approved by VARA and must not be represented or construed as such.

This is one of the most practically important parts of the regime.

It means many “ordinary” token issuances do not follow the full Category 1 licence route.
But they still do not sit outside regulation.

Instead, the route is:

• no VARA licence for the issuer solely by reason of Category 2 status,
• no prior approval if the Licensed Distributor requirement is met,
• but distribution must be handled through or by a Licensed Distributor, and that distributor assumes responsibility for validating compliance with the issuance rulebook.

For founders, the practical consequence is huge:

If your token is Category 2, you still cannot treat the launch as an unregulated self-distribution event.
Your distribution strategy has to be built around a Licensed Distributor.

That makes Category 2 less burdensome than Category 1, but it is still very much within the VARA ecosystem.

6) Exempt VAs: lighter route, not no-regulation route

The Exempt VA pathway is the lightest of the three, but it is not a “free pass.”

The rulebook says entities in the Emirate may issue Exempt VAs without prior approval from VARA, provided they comply with Part II of the VA Issuance Rulebook at all times. It also states that issuers of Exempt VAs remain subject to VARA’s supervision, examination, and enforcement.

That means the right founder understanding is:

• no prior approval does not mean
• no VARA relevance.

The rulebook still keeps Exempt VA issuers inside the regulatory environment for conduct and enforcement purposes.

This is where many token founders make a practical mistake. They hear the word “exempt” and assume it means:

• no whitepaper,
• no conduct rules,
• no scrutiny,
• no regulatory consequences.

That is not correct.

Exempt VAs are exempt from prior approval, not exempt from the entire VARA framework.

7) Whitepaper and risk disclosure: required for almost everyone

One of the most important practical obligations in the VA Issuance Rulebook sits in Part III – Whitepapers and Public Disclosures.

The rulebook says:

• all entities in the Emirate issuing a Virtual Asset must comply with Part III and publish both a Whitepaper and a Risk Disclosure Statement;
• the only exception is that issuers of Exempt VAs do not need to publish a Whitepaper or Risk Disclosure Statement in respect of those Exempt VAs.

This is a major point.

It means that for:

• Category 1 issuers, and
• Category 2 issuers,

whitepaper and risk-disclosure obligations are not optional. They are core parts of the issuance framework.

For founders asking, “Can I issue a token in Dubai?” the practical answer is often:

• yes, but only if you are prepared to issue a proper whitepaper and risk disclosure,
• unless you genuinely fall into the Exempt VA bucket.

This is one reason token launches in Dubai should not be treated as purely marketing-driven events.
Disclosure is built into the regulatory architecture.

8) Not every token can be issued: prohibited VAs exist

Another critical point is that not every token structure is even allowed.

The VA Issuance Rulebook’s Prohibited Virtual Assets section states that issuing Anonymity-Enhanced Cryptocurrencies and all VA Activities related to them are prohibited in the Emirate.

This matters because a token project should not start only with the question:

“Which issuance category are we in?”

It should first ask:

“Is the token even permissible to issue in Dubai?”

If the token falls into a prohibited class, the licensing or approval pathway is no longer the main issue. The issue is that the token cannot be issued under the VARA framework in the first place.

That is why token analysis must begin with permissibility, then classification, then pathway.

9) “Utility token” is not the legal answer

A lot of founders try to solve the issuance question by saying:

• “It’s only a utility token.”
• “It’s not a stablecoin.”
• “It’s not a security.”
• “It’s just for ecosystem access.”

Under VARA, that kind of commercial shorthand is not enough.

The current VA Issuance Rulebook says categorization depends on the token’s characteristics and the underlying business model associated with the VA. It also says that if a token changes in a way that pushes it into a different category, the issuer must satisfy the requirements of the new category before that change takes effect.

So the right question is not:

“What do we call the token?”

It is:

“What rights, references, mechanics, and business model attach to the token, and what category does that place it in under VARA?”

That is a much more useful legal question.

It also means a token that starts its life as one thing may not stay in the same category forever if the model evolves.

10) Token issuance can trigger more than just issuance rules

Another common mistake is assuming that token issuance is only about the VA Issuance Rulebook.

That is not always true.

For Category 1 VA Issuance, the rulebook expressly says issuers must also comply with:

• the Company Rulebook
• the Compliance and Risk Management Rulebook
• the Technology and Information Rulebook
• the Market Conduct Rulebook.

And even outside Category 1, token projects can still trigger broader regulated activities depending on what else the business does.

For example:

• a token project that also arranges sales or placements for others may implicate distribution or broker-style issues,
• a token project that also runs a market or venue may raise exchange issues,
• a token project that controls client wallets may raise custody issues,
• a token project that transfers VAs between wallets or parties may raise transfer and settlement issues. VARA’s Schedule 1 shows how issuance-related services and broader VA Activities can sit alongside each other in the same regime.

So for founders, the practical lesson is:
token issuance is often not the only regulatory question in the model.

You also need to ask whether the business around the token is triggering one or more separate VA Activities.

11) Fees and cost: token issuance under VARA is not just legal theory

The visible fee burden depends on the category.

For Category 1 VA Issuance, the published fee schedule sets:

• AED 100,000 application fee
• AED 200,000 annual supervision fee. VARA may also impose a fee for applications by prospective issuers for approval to issue a Virtual Asset and/or for licensed Category 1 issuers submitting whitepapers to VARA.

For Category 2, there is no Category 1-style licence fee for the issuer solely by reason of being Category 2, but the issuer must structure placement/distribution through a Licensed Distributor, which has obvious commercial and structuring implications.

For Exempt VAs, there is no prior approval route, but the issuer still remains subject to VARA supervision and must comply with the applicable general rules.

This means the practical cost question is not just:

“What does the filing fee cost?”

It is:

“What category are we in, what approvals or licensed intermediaries are required, and what ongoing regulatory burden follows from that?”

12) What founders should do before launching a token in Dubai

If you are considering a token launch in Dubai, the safest practical sequence is:

First, test permissibility

Make sure the token is not in a prohibited class, including anonymity-enhanced cryptocurrencies.

Second, classify the token

Work out whether the token is:

• Category 1,
• Category 2,
• or Exempt,
  based on its features and underlying business model.

Third, decide the regulatory pathway

• Category 1: full VARA licence route.
• Category 2: no licence or prior approval if distributed through or by a Licensed Distributor.
• Exempt VA: no prior approval, but still subject to Part II and VARA supervision.

Fourth, prepare disclosure

For all non-Exempt VA issuances, prepare the required:

• Whitepaper
• Risk Disclosure Statement.

Fifth, examine the wider business model

Check whether the token project also triggers:

• brokerage,
• exchange,
• custody,
• transfer and settlement,
• or other VA Activities.

That is the practical discipline that keeps token issuers from treating the launch as a branding event when it is really a regulated event.

13) The real practical answer

So, can you issue a token in Dubai?

Yes — but only if you first determine which VARA issuance category applies and follow that pathway correctly.

If the token is Category 1, you need a VARA Licence, and for FRVAs and ARVAs you will also need approval for each token issuance.

If the token is Category 2, the current rulebook says you do not need a VARA licence or prior approval solely for the issuance, but all placement and distribution must be carried out through or by a Licensed Distributor, and the token must not be described as VARA-approved.

If the token is an Exempt VA, you may issue it without prior approval, but you remain subject to VARA supervision and must comply with the general rules in the VA Issuance Rulebook.

And in almost every case except Exempt VAs, you should assume whitepaper and risk-disclosure obligations will apply.

That is the practical answer under the current VARA framework.

Final takeaway

If you want the cleanest practical answer to:
“Can I issue a token in Dubai?”

it is this:

Yes, but not before you classify the token correctly under VARA’s VA Issuance Rulebook. The current framework divides issuances into Category 1, Category 2, and Exempt VAs, with different prior requirements for each. Category 1 requires a licence; Category 2 requires placement/distribution through or by a Licensed Distributor and no prior approval if that condition is met; Exempt VAs require no prior approval but remain subject to ongoing rules and VARA supervision.

So the right founder question is not:

“Can I launch a token?”

It is:

“What kind of token am I launching, what regulatory bucket does it fall into, and what does VARA require before it goes live?”

How CRYPTOVERSE Legal Can Help

At CRYPTOVERSE Legal Consultancy, we help founders, token projects, exchanges, and digital asset businesses assess whether a proposed token issuance in Dubai falls into Category 1, Category 2, or Exempt VA under VARA, and what that means for licensing, distribution, disclosure, and launch structure. Our support includes token classification analysis, VA issuance pathway advice, whitepaper and risk-disclosure review, licensed-distributor structuring guidance, and broader VARA licensing strategy.

If you want tailored guidance on whether you can issue a token in Dubai under VARA, and how to structure the launch correctly from day one, contact CRYPTOVERSE Legal to discuss your regulatory strategy.

FAQs