Payward FZCO, a Dubai-based subsidiary of the cryptocurrency exchange Kraken, received preliminary approval from the Virtual Assets Regulatory Authority (VARA) on Thursday, May 21, 2026. This conditional authorization allows the platform to move toward offering services under the Broker-Dealer and Investment and Management categories. The decision signals a strategic return to the United Arab Emirates market after the company closed its Abu Dhabi office in February 2023 during a period of global restructuring.
The approval represents the initial stage of a two-step licensing process mandated by the Virtual Assets Regulatory Authority to ensure investor protection and market integrity. To secure a full Virtual Asset Service Provider (VASP) license, Payward FZCO must now finalize compliance documentation and secure a physical office lease within the Emirate. This shift from Abu Dhabi to Dubai highlights the growing concentration of institutional capital and liquidity within the local regulatory perimeter established by VARA.
Dubai has spent years refining a legal framework that specifically addresses digital assets. This regulatory clarity recently impacted market sentiment, much like how XRP saw a liquidity surge following similar administrative shifts. Kraken Co-CEO Arjun Sethi noted that the existence of a local, supervised entity is what distinguishes professional markets from offshore operations, providing institutional clients with a familiar rulebook.
Planned services and local currency integration
Once the exchange secures its full operational authorization, it intends to offer a wide range of trading products. These include spot trading, margin trading, and staking services, alongside access to the institutional-grade Kraken Prime platform. Initially, the firm will roll out its \”Buy, Trade and Earn\” suite, providing direct access to the market for both retail and professional investors throughout Dubai.
A key component of the new offering is the integration of UAE Dirham (AED) funding and withdrawals. This allows users to move capital directly through local currency rails rather than relying on international transfers. Such moves to bridge traditional finance and digital assets mirror wider trends, including when Morgan Stanley expanded bitcoin access for its clients to meet growing wealth management demands.
Over time, Kraken plans to expand its regional portfolio to include derivatives and lending products. These additions remain subject to further regulatory approvals for qualified clients. By using a local entity, the company ensures that users operate on the same global order book while benefiting from the oversight of a dedicated local supervisor, a standard Sethi believes all licenses should meet.
Regulatory milestones and market context
Kraken originally established a presence in the UAE on April 25, 2022, after receiving a license from the Abu Dhabi Global Market (ADGM). However, the exchange’s February 2023 restructuring resulted in the closure of its Abu Dhabi physical branch and the suspension of AED trading pairs. The new push into Dubai through Payward FZCO indicates a renewed commitment to the region’s evolving digital asset landscape.
The path to full licensing requires strict adherence to VARA’s capital requirements and client asset arrangement protocols. Typically, broker-dealers under this framework must maintain capital reserves between AED 400,000 and AED 600,000. These safeguards are designed to manage risk in an environment where the utility of digital assets is becoming the primary driver for long-term platform survival.
While the preliminary approval is a major step, the firm is not yet listed on the VARA public register of fully operational providers. A specific date for the full launch remains unconfirmed as the final operational steps are completed. For now, the preliminary license permits the company to prepare its infrastructure for served clients within the Emirate of Dubai, excluding the Dubai International Financial Centre.