Dubai’s Virtual Assets Regulatory Authority and Mastercard have signed a Memorandum of Understanding aimed at advancing the emirate’s virtual assets ecosystem, with the two organizations set to explore stablecoin applications, regulatory sandbox opportunities and support for emerging digital-asset businesses.
The agreement brings together VARA’s regulatory expertise and Mastercard’s global experience in payments technology and digital innovation as Dubai seeks to strengthen its position as a regulated hub for virtual assets.
The collaboration will focus on industry engagement, knowledge sharing and opportunities to support emerging technologies and market participants. It will also explore initiatives for founders and younger companies in the virtual assets sector, including potential experimentation through regulatory sandboxes.
Importantly, the MoU does not itself create a new virtual asset license or authorize unlicensed activity. Firms carrying out regulated virtual asset services in or from Dubai, excluding the Dubai International Financial Centre, remain subject to VARA’s licensing and supervisory requirements.
Regulation meets payments
The partnership reflects a broader shift in the digital-asset market from cryptocurrency trading toward infrastructure that can connect blockchain-based assets with established payments and financial systems.
VARA was established in March 2022 under Dubai Law No. 4 of 2022 and regulates virtual assets and related activities across Dubai’s mainland and free zones, excluding the DIFC. Its framework covers activities including exchange, broker-dealer, custody, lending and borrowing, investment management, transfer and settlement and certain issuance services.
Mastercard, meanwhile, has been expanding its infrastructure around stablecoins, tokenized value and on-chain payments.
The company completed its acquisition of stablecoin infrastructure provider BVNK in August, adding technology designed to connect fiat currencies with blockchain-based forms of money. Mastercard had agreed in March to acquire BVNK for up to $1.8 billion, including $300 million in contingent payments.
Matthew White, Chief Executive Officer of VARA, said: “Dubai’s ambition is not simply to participate in the future of finance, but to help shape it. Collaboration between regulators and global industry leaders is essential to building an ecosystem where innovation can flourish alongside strong regulatory standards. Our engagement with Mastercard reflects our commitment to fostering responsible innovation, strengthening market confidence and ensuring Dubai remains at the forefront of the evolving digital economy.”
Read more: Dubai’s VARA issues 50th VASP license as virtual assets market continues to grow
Stablecoins move closer
Stablecoins are one of the clearest areas where the two organizations’ respective mandates could intersect.
The MoU specifically draws on Mastercard’s experience developing infrastructure and capabilities that support the use of stablecoins and other digital forms of value in real-world payments.
Mastercard has already been expanding stablecoin settlement across its wider payments network. In June, it announced plans to support additional intraday, weekend and holiday settlement options using both traditional currencies and regulated stablecoins.
The company said its infrastructure would support regulated stablecoins including USDC, PYUSD, USDG, USDP, RLUSD and SoFiUSD across blockchain networks such as Ethereum, Solana, Polygon, Base, Arbitrum and XRPL.
In October, Mastercard and BVNK launched the Global Money Platform, combining fiat and stablecoin capabilities through a single interface for banks, fintechs and enterprises. The platform supports multi-currency accounts, conversion between traditional currencies and stablecoins, stablecoin-linked cards and local bank payouts.
Mastercard Move, which is integrated into the platform, reaches more than 17 billion endpoints. Coverage for local-currency payouts from stablecoin balances is expected to expand to more than 40 currencies across more than 200 countries and territories in 2027, while card issuance is available across more than 130 countries.
Gina Petersen-Skyrme, Senior Vice President and Country Manager, UAE and Oman, at Mastercard, said:
“The potential of digital assets lies in their ability to create new ways for people and businesses to exchange value. Realizing that potential requires clear regulatory frameworks, trusted infrastructure and close collaboration across the ecosystem. At Mastercard, we are bringing our global expertise in payments, security and digital assets to our work with VARA, exploring how emerging technologies can be applied responsibly and contribute to Dubai’s ambition to shape the future of finance.”
Sandbox path opens
The startup and experimentation element of the MoU could be equally significant for Dubai’s virtual asset industry.
VARA and Mastercard said they will explore support for founders and emerging businesses, including opportunities for experimentation through regulatory sandboxes.
A sandbox approach can allow new financial technologies and business models to be examined in a controlled environment before broader commercial deployment, while giving regulators greater visibility into potential risks and operational requirements.
However, the announcement describes sandbox initiatives as an area the parties will explore rather than announcing a new live sandbox program or granting automatic regulatory approval to participants.
VARA’s existing rules remain applicable. Companies seeking to conduct virtual asset activities in Dubai must complete the required licensing process before offering regulated services to clients.
Security is also becoming a larger part of stablecoin adoption.
Mastercard introduced Stablecoin Security in October, a risk-intelligence system designed to combine payment and blockchain information so financial institutions can assess fraud, scam, sanctions and other financial-crime indicators across stablecoin transactions.
The company cited research covering 593 million stablecoin transfer events across 141 million Ethereum transactions in 2025, which found that nearly 60 percent involved complex, multi-step movements rather than simple one-to-one transactions.
That complexity helps explain why regulation, compliance and payments infrastructure are increasingly developing alongside the technology itself.
The VARA-Mastercard agreement also aligns with Dubai’s wider economic strategy.
Virtual assets form one part of that broader ambition, with Dubai seeking to attract financial institutions, technology companies, startups and investment while maintaining a defined regulatory framework.
The Dubai Economic Agenda D33 places technology, innovation and digital transformation at the center of the emirate’s long-term growth model and aims to double Dubai’s economy by 2033.
