The MiCA regulation (Regulation (EU) 2023/1114) is the EU's single rulebook for crypto: since 1 July 2026 nobody may provide crypto-asset services to EU clients without a MiCA license, and one license from one member state can be passported to all 27. Dubai's VARA works differently. It licenses each activity separately (exchange, custody, broker-dealer and so on), covers Dubai only, excluding DIFC, and charges a fixed fee per activity. If your users are in Europe you need MiCA; a VARA license doesn't replace it.
What the MiCA regulation covers
MiCA was adopted on 31 May 2023 and published in the Official Journal (L 150, 9 June 2023). Under Article 149, the stablecoin titles (III and IV) applied from 30 June 2024 and everything else from 30 December 2024. It has three main parts:
- Crypto-asset service providers (CASPs). Ten services need authorization under Article 3(1)(16): custody and administration, operating a trading platform, exchange of crypto for funds, exchange of crypto for other crypto, execution of orders, placing, reception and transmission of orders, advice, portfolio management, and transfer services.
- Stablecoins. Asset-referenced tokens (ARTs) and e-money tokens (EMTs) each get their own title with issuer licensing, reserve and redemption rules.
- Other crypto-assets. Public offers and admissions to trading need a published white paper.
MiCA doesn't cover crypto tax reporting. That sits in a separate directive, DAC8, which we explain in DAC8 explained: what automatic crypto reporting means for European investors.
MiCA license: CASP authorization and passporting
A MiCA license is an authorization as a CASP from the regulator of one member state (the home state). Article 59(2) sets the conditions that matter most to a founder outside the EU: a registered office in a member state where you carry out at least part of your services, your place of effective management in the Union, and at least one director resident in the Union.
Minimum capital
Article 67 requires prudential safeguards of at least the higher of a fixed minimum (Annex IV) or one quarter of the previous year's fixed overheads. The fixed minimums depend on the class of service:
- Class 1, EUR 50,000: execution of orders, placing, transfer services, reception and transmission of orders, advice, portfolio management.
- Class 2, EUR 125,000: any Class 1 service plus custody, exchange of crypto for funds, or exchange of crypto for crypto.
- Class 3, EUR 150,000: any Class 2 service plus operating a trading platform.
A firm with EUR 2 million in fixed costs therefore needs EUR 500,000, whatever its class.
How long authorization takes on paper
Article 63 gives the regulator 25 working days to decide whether an application is complete, then 40 working days from a complete application to grant or refuse. The clock starts only once the file is complete, so real timelines vary by country. MiCA itself sets no application fee; each national regulator charges its own.
Passporting
Once authorized, you send the home regulator a list of the member states and services you want to cover (Article 65). The regulator forwards it to the host states within 10 working days, and you can start in those states when you're told it was sent, or at the latest from the 15th calendar day after you filed.
Which MiCA transitional periods have ended
Article 143(3) let firms that were already legally serving clients under national law before 30 December 2024 keep going until 1 July 2026 at the latest, and allowed each member state to shorten that window. ESMA's list of grandfathering periods (latest version dated 19 May 2026) shows what each one chose, counted from 30 December 2024:
- 6 months, ended mid-2025: Finland, Hungary, Latvia, the Netherlands, Poland, Slovenia.
- 9 months, ended autumn 2025: Sweden.
- 12 months, ended end of 2025: Austria, Germany, Ireland, Lithuania, Slovakia (and Norway in the EEA).
- 18 months, ended 1 July 2026: Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, France, Greece, Italy, Luxembourg, Malta, Portugal, Romania, Spain (and Iceland and Liechtenstein).
Some states also required firms to apply by a cut-off to use the grace period at all: Czechia by 31 July 2025, Bulgaria by 8 October 2025, Italy by 30 December 2025, Denmark by 30 December 2024.
So as of October 2026, every transitional period in the EU is over. ESMA's statement of 17 April 2026 says any entity providing crypto-asset services to EU clients without a MiCA license after 1 July 2026 "will be in breach of EU law". Its 23 June 2026 statement told unauthorized firms to stop onboarding EU clients, stop marketing, and wind down. It also reminded non-EU firms that they can't serve or solicit EU clients, even business to business, outside the narrow reverse solicitation rule in Article 61.
MiCA crypto rules for stablecoins
MiCA splits stablecoins into two types, and both are tightly drawn:
- E-money tokens (EMTs) reference one official currency, like a euro or dollar coin. Under Article 48, only a credit institution or an electronic money institution may issue one to the public in the EU. Tokens must be issued and redeemed at par, at any time (Article 49), and at least 30% of the funds received has to sit in separate accounts at credit institutions (Article 54).
- Asset-referenced tokens (ARTs) reference a basket or anything other than one currency. The issuer must be authorized and established in the EU (Article 16), hold own funds of at least EUR 350,000, 2% of the average reserve, or a quarter of fixed overheads, whichever is highest (Article 35), and keep a segregated reserve of assets (Article 36).
Neither issuers nor CASPs may pay interest on ARTs or EMTs. That rules out stablecoin "earn" products.
VARA Dubai: licensing activity by activity
VARA was set up under Dubai Law No. 4 of 2022 and regulates virtual assets across Dubai's mainland and free zones, except DIFC. Instead of one license with service classes, it lists eight licensed activities: Advisory, Broker-Dealer, Custody, Exchange, Lending and Borrowing, Management and Investment, Transfer and Settlement, and Category 1 VA Issuance. A firm can hold several activities under one license, with one exception: custody must sit in a separate legal entity with its own license. Licensed firms can't trade on their own account either; that needs a separate company.
Every firm follows four compulsory rulebooks plus one per activity. Our post on VARA license types in Dubai goes through each category.
How a VARA license is granted
According to VARA's licence application page, it runs in two stages. First you file an Initial Disclosure Questionnaire through Dubai Economy and Tourism (mainland) or a Dubai free zone, pay about 50% of the application fee, and receive an Approval to Incorporate. You then set up the company, office and staff, but can't operate yet. Then you apply for the full VASP license, pay the rest of the fee plus the first year's supervision fee, and may receive a license with conditions. VARA doesn't publish a fixed decision deadline.
VARA fees and capital
From Schedule 2 of the Virtual Assets and Related Activities Regulations 2023 and Company Rulebook Part VI.B:
| VARA activity | Application fee | Annual supervision fee | Paid-up capital (higher of) |
|---|---|---|---|
| Advisory | AED 40,000 | AED 80,000 | AED 100,000 |
| Broker-Dealer | AED 100,000 | AED 200,000 | AED 600,000 or 25% of fixed overheads (AED 400,000 or 15% using a VARA custodian) |
| Custody | AED 100,000 | AED 200,000 | AED 600,000 or 25% of fixed overheads |
| Exchange | AED 100,000 | AED 200,000 | AED 1,500,000 or 25% of fixed overheads (AED 800,000 or 15% using a VARA custodian) |
| Lending and Borrowing | AED 100,000 | AED 200,000 | AED 500,000 or 25% of fixed overheads |
| Management and Investment | AED 100,000 | AED 200,000 | AED 500,000 or 25% (AED 280,000 or 15% using a VARA custodian) |
| Transfer and Settlement | AED 40,000 | AED 80,000 | AED 500,000 or 25% of fixed overheads |
Each extra activity costs a license extension fee of 50% of the lower application fee, and the supervision fee is charged per activity, every year. Capital is counted per activity and held in a UAE bank trust account or surety bond in VARA's favour. DET or free zone fees come on top.
Stablecoins under VARA
Issuing a fiat-referenced virtual asset is Category 1 VA Issuance and needs a license plus VARA approval for each token. The capital rule is AED 1,500,000 plus 2% of the token's available supply. Two limits matter: a token pegged to the dirham falls under the UAE Central Bank, not VARA, and VARA-approved fiat-referenced tokens may be used only inside the virtual asset ecosystem, not to pay for goods and services in the UAE.
MiCA vs VARA: side-by-side comparison
| MiCA (EU) | VARA (Dubai) | |
|---|---|---|
| Scope | 10 crypto-asset services in 3 capital classes, plus ART, EMT and white paper rules | 8 licensed activities, each with its own rulebook |
| Market access | Home state plus passport to all 27 member states | In or from Dubai, excluding DIFC; no EU access |
| Minimum capital | EUR 50,000 / 125,000 / 150,000, or a quarter of fixed overheads if higher | AED 100,000 to AED 1,500,000 per activity, or 15 to 25% of fixed overheads if higher |
| Timeline | 25 working days to completeness, then 40 working days to decide | Two stages (Approval to Incorporate, then license); no published deadline |
| Regulator fees | Set by each national regulator | AED 40,000 to 100,000 to apply, AED 80,000 to 200,000 a year per activity |
| Local presence | EU registered office, effective management in the EU, at least one EU-resident director | Dubai entity set up after the Approval to Incorporate, with office and staff |
| Stablecoins | EMTs only by banks or e-money institutions; ARTs with EUR 350,000+ own funds; no interest | License plus per-token approval; AED 1.5m + 2% of supply; AED-pegged tokens go to the Central Bank |
How a founder chooses
Start with where your clients are, not where the regulator is friendlier.
- Retail or business clients in the EU: you need a MiCA license, held by an EU entity that's actually run from the EU. No grace period is left anywhere in the EU.
- Clients in the Gulf, Asia or elsewhere outside the EU, with a team in Dubai: a VARA license fits. You pick only the activities you need, the costs are published, and the company sits where your founders can hold UAE tax residency.
- Both markets: many groups run two licensed entities, a VARA company for non-EU business and an EU CASP for European clients. Each needs its own staff and capital, and the EU entity can't delegate custody to the Dubai one.
Count the per-activity cost in Dubai: an exchange that adds broker-dealer services pays two supervision fees a year and holds capital for each. Banks will ask for the license in both places; see our notes on corporate banking.
Common questions
What is the MiCA regulation?
MiCA is Regulation (EU) 2023/1114, the EU law on markets in crypto-assets. It licenses crypto-asset service providers, sets rules for stablecoin issuers (ARTs and EMTs) and requires white papers for other token offers.
Is the MiCA transitional period over?
Yes. The longest grandfathering period allowed was until 1 July 2026, and many member states chose 6 or 12 months, which ended in 2025. Since 1 July 2026 ESMA says anyone serving EU clients without a MiCA license is breaking EU law.
How much capital do you need for a MiCA license?
EUR 50,000 for Class 1 services such as advice or order execution, EUR 125,000 for Class 2 (custody or exchange) and EUR 150,000 for Class 3 (operating a trading platform). If a quarter of last year's fixed overheads is higher, that amount applies instead.
Does a VARA license let you serve EU clients?
No. MiCA requires an EU authorization to provide crypto-asset services to EU clients, and ESMA has said non-EU firms may not solicit EU clients, even business to business.
How much does a VARA license cost in Dubai?
VARA's own fees are AED 40,000 or AED 100,000 to apply, depending on the activity, and AED 80,000 or AED 200,000 a year in supervision fees per activity. Paid-up capital runs from AED 100,000 for advisory to AED 1,500,000 for an exchange that doesn't use a separate VARA custodian.
If you want to work out which structure fits your plans, you can request a free assessment.
Sources
- Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), EUR-Lex, OJ L 150, 9 June 2023. Articles 3, 16, 35, 36, 48, 49, 54, 59, 61, 63, 65, 67, 143, 149 and Annex IV; checked 15 October 2026.
- ESMA, List of grandfathering periods decided by Member States under Article 143 of MiCA, version dated 19 May 2026; checked 15 October 2026.
- ESMA, Statement on the end of transitional periods under MiCA, 17 April 2026; checked 15 October 2026.
- ESMA, Public statement on unauthorised CASPs as the MiCA transitional period ends, 23 June 2026; checked 15 October 2026.
- VARA, Licensed Activities, checked 15 October 2026.
- VARA, Licence Applications, checked 15 October 2026.
- VARA, Virtual Assets and Related Activities Regulations 2023, Schedule 2: Supervision and Authorisation Fees, checked 15 October 2026.
- VARA Company Rulebook, Part VI.B Paid-Up Capital, checked 15 October 2026.
- VARA VA Issuance Rulebook, Annex 1 (Fiat-Referenced Virtual Assets), Part I.B and Part III.F Capital Requirements, checked 15 October 2026.