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Legal and regulatory architecture for stablecoin projects
- Token classification and selection of the applicable regulatory regime
- Project structuring and core documentation
- Licensing strategy and regulator engagement
- AML/KYC and sanctions compliance
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About the service
Mirsatori provides legal and regulatory support for stablecoin projects: we assess the token’s legal classification, analyze applicable requirements, and structure the documentation and compliance procedures needed for a compliant launch and effective engagement with regulators and counterparties.
Key stablecoin characteristics
Price stability
Designed to maintain value against a defined reference, most commonly 1:1.
Peg mechanism
Pegged to fiat (or a basket of currencies), commodities, crypto collateral, or maintained via an algorithmic mechanism, depending on the model.
Reserves and transparency
For collateralised models: disclosure of reserve composition, custody/segregation arrangements, and procedures to evidence sufficiency.
Issuance and redemption
Minting and redeemability rules define conversion mechanics and tokenholder rights on redemption.
Governance model
Can be centrally issued and controlled by an issuer, or implemented via decentralised DLT-based architecture.
Smart contract logic
Issuance, redemption, and transfer restrictions can be automated through smart contracts, including embedded compliance controls.
Access and restrictions
Permissioned or permissionless; may include user onboarding rules and jurisdictional limits, including sanctioned territories.
Integration and interoperability
Compatibility with DeFi and other platforms via token standards and infrastructure (including bridges).
Transaction parameters
Fees and settlement speed depend on the underlying network and infrastructure choices.
Compliance requirements
Depending on jurisdiction and structure: AML/KYC, sanctions screening, transaction monitoring, and reporting.
Audit and security
Independent reserve attestations/audits and security audits of smart contracts and infrastructure.
Scalability
Throughput depends on the network’s capacity and the selected technical architecture.
Explore Mirsatori guide to building stablecoin projects
- What stablecoins are and the main collateralisation models
- Key legal considerations for issuing and circulating stablecoins
- Core compliance and regulatory requirements
Explore Mirsatori guide to building stablecoin projects
VARA standards for stablecoins in Dubai
Dubai’s Virtual Assets Regulatory Authority (VARA) has introduced a dedicated regulatory framework for the issuance and circulation of fiat-referenced virtual assets (FRVAs), including stablecoins, subject to compliance with the applicable requirements.
A fiat-referenced virtual asset (FRVA) is a virtual asset designed to maintain a relatively stable value by referencing one or more fiat currencies. FRVAs are not legal tender and are regulated as virtual assets under VARA’s regime.
FRVA regulation in Dubai covers, in particular:
- Virtual asset classification and the permitted fiat-referencing (pegging) structures for FRVAs.
- Reference currency requirements, including restrictions linked to sanctioned countries/territories under UAE Federal AML/CFT laws.
- A prohibition on issuing AED-referenced stablecoins under VARA’s FRVA rules (these fall under the exclusive remit of the Central Bank of the UAE).
- Reserve asset requirements, including sufficiency, custody/segregation, and disclosure obligations for backing assets.
Mirsatori regulatory support under VARA requirements (Dubai)
Mirsatori regulatory support under VARA requirements (Dubai)
VARA (Dubai Virtual Assets Regulatory Authority) is the regulator that sets the rules and requirements for virtual asset activities in Dubai. Mirsatori provides end-to-end legal and regulatory support, including:
Regulatory & compliance assessment
Legal analysis of the applicable regulatory regime and compliance perimeter in the selected jurisdiction (including requirements of the relevant regulators, where applicable).
Licensing and regulatory engagement
Identification of licensable activities, preparation of the documentation package, and support with communications with the regulator.
Structuring and documentation
Design of the corporate structure (entities) and drafting/review of key documents (terms, disclosures, risk factors, privacy policy, etc.).
Token legal classification
Assessment of the risk of the token being classified as a security or other regulated instrument, and structuring recommendations to address the implications.
AML/KYC policies and procedures
Development and implementation of internal compliance controls, due diligence procedures, monitoring, and reporting.
Smart contracts and tokenomics
Legal/compliance assessment of tokenomics and coordination of a technical smart contract security review.
Data protection
Alignment of data processing practices with GDPR and other applicable legal regimes (depending on user geography and the operating model).
Avoid regulatory mistakes when launching a stablecoin
Legal assessment of your model and end-to-end support to implement it in line with applicable regulatory requirements
Unlock your options — consult with an expert today
Who needs stablecoin project support
- Crypto startups and stablecoin teams that need token legal classification and alignment with regulatory requirements
- Investors and venture capital firms evaluating stablecoin projects and requiring a clear regulatory and compliance position
- Financial institutions and banks planning stablecoin integration and needing to meet regulatory and risk standards
- Builders and founders who need properly structured documentation and compliance procedures for launch and counterparty onboarding
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FAQ
What is a stablecoin from a legal perspective?
A stablecoin is a virtual asset designed to maintain a relatively stable value by referencing a fiat currency, a basket of currencies, or other assets. In most jurisdictions, it is not legal tender and is regulated as a virtual asset or a financial instrument, depending on the structure.
Do you need a licence to issue a stablecoin?
It depends on the jurisdiction and the project structure. In many cases, issuing and operating a stablecoin requires registration or licensing as a virtual asset service provider and compliance with AML/KYC and reserve requirements.
How do stablecoins differ from CBDCs?
Stablecoins are issued by private entities and regulated under private-sector regulatory frameworks, while CBDCs are a digital form of sovereign currency issued by a central bank under public-law mandates.
What reserve requirements typically apply to stablecoins?
Regulators commonly require sufficient and highly liquid reserves, clear rules on custody and segregation, periodic disclosures, and independent verification or audit.
Can a stablecoin be issued for international use?
Yes, but it requires careful consideration of cross-border regulation, sanctions constraints, AML/KYC requirements, and the rules of each jurisdiction where the token is offered or used.
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