VARA Lending & Borrowing Services Licence
Lending or borrowing virtual assets in Dubai, where the borrower must return the virtual assets, requires VARA's Lending and Borrowing Services licence. Fiat loans secured on crypto may raise other regulatory issues and need separate analysis. Because lending concentrates credit, liquidity and collateral risk, VARA expects robust risk management and clear client disclosures. VAF Global prepares the compliance and risk framework for lending platforms.
Who needs this licence?
- Crypto lending and borrowing platforms
- Platforms that borrow client virtual assets
- Institutional virtual asset lending desks
- Yield products that lend client assets to third parties
What lending and borrowing covers
Virtual asset loans
Lending or borrowing virtual assets that must be returned to the lender.
Fiat loans against crypto
Fiat loans secured on virtual assets fall outside VARA's lending definition and may involve other regulators; they need separate analysis.
Yield on client assets
Products that generate yield by lending client assets may fall in scope.
Client categories
VARA may restrict which client types can access lending products.
Key requirements
- A commercial licence from Dubai Economy and Tourism (DET) or a Dubai free zone authority
- Compliance with VARA's compulsory rulebooks: Company; Compliance & Risk Management; Technology & Information; Market Conduct
- Fit and proper shareholders, board and senior management, including a Compliance Officer and MLRO
- AML/CFT programme with KYC, transaction monitoring (KYT), sanctions screening, Travel Rule and goAML reporting
- Collateral, margin and liquidation policies
- Credit and counterparty risk management
- Clear risk disclosures and client agreements
- Liquidity management and stress testing
The licensing process
- 1
Activity mapping
Confirm exactly which VARA activities your model needs. Many businesses need more than one.
- 2
Initial Disclosure Questionnaire
Submit VARA's IDQ through DET or your Dubai free zone, with the business plan and owner and management details.
- 3
Approval to Incorporate
VARA issues an Approval to Incorporate. Set up the company and operations; no virtual asset activity is allowed yet.
- 4
Full application
File the full licence application with policies, risk assessments, financials and key personnel.
- 5
VASP Licence
VARA issues the licence, which may carry operational conditions; supervision and annual renewal follow.
How VAF Global helps
We prepare and run the compliance side of your licence, so your application meets the regulator's expectations from day one.
- Activity mapping across VARA rulebooks
- AML/CFT, KYC, sanctions and Travel Rule policies
- Business-wide and customer risk assessments
- Compliance manuals aligned to the activity rulebook
- Outsourced MLRO (where VARA permits) and support for your in-house Compliance Officer
- KYT transaction monitoring with our KYT tool
VARA Lending & Borrowing Licence: FAQ
Is crypto staking the same as lending under VARA?
+
Not usually. VARA's Regulations list staking client assets as an example of VA Management and Investment Services, while lending is a separate activity. The licence needed depends on how client assets are used.
Can retail clients use crypto lending products in Dubai?
+
VARA can apply restrictions by client type. Firms should check current rulebook requirements for the clients they target.
Can I combine this with other VARA activities?
+
Yes. A VARA licence lists each authorised activity, and many firms hold several. Each additional activity brings its own rulebook requirements, so it is best to plan the full scope before applying.
Other UAE licensing guides
Last reviewed October 2026. This guide is general information for compliance planning, not legal advice. Regulatory requirements change; always confirm current rules with the regulator. VAF Global is a compliance consultancy and does not provide legal services.