VARA Is Not a Wild Card: Dubai Crypto Payments Still Depend on the Central Bank

Dubai's VARA licence alone does not cover crypto payment flows that involve converting tokens into fiat for merchants, according to a legal analysis of the emirate's regime. The UAE's new central bank law, effective September 16, 2025, puts virtual-asset payment services under central bank licensing while excluding investment and token-to-token trading, and the Payment Token Services Regulation (in force since August 31, 2024) requires separate approval for payment-token custody and transfer and for conversion, with USDT and USDC among the stablecoins in scope. A firm holding only VARA's transfer and settlement permission cannot treat it as a custody qualification, and must also comply with central bank payment and remittance rules. Merchants in Dubai can accept dirham payment tokens issued by central bank-licensed issuers, as in Network International's September 2026 DDSC pilot at Marks & Spencer, while foreign-currency tokens from registered issuers are limited to buying virtual assets. Crypto.com Pay's Dubai Duty Free rollout in August 2026 relies on Foris DAX Middle East holding both a VARA licence and a central bank stored-value facility licence, a dual-permission model other providers may need to replicate.