The Dubai Virtual Asset Regulation Law signed into law by the Emirate. It will create a new regulatory body to oversee the virtual asset industry, which includes cryptocurrencies and non-fiat currencies.
Sheikh Mohammed bin Rashid Al Maktoum is the ruler and vice president of Dubai. He announced the passage of a new law aimed at regulating virtual assets such as cryptocurrency and non-fungible tokens (NFTs).
For several years, the UAE has been at the forefront of crypto and blockchain usage. It aspires to maintain its status as a major global financial center. Dubai aspires to build a sophisticated legal framework that will protect investors under the law. Establish worldwide guidelines to control the virtual asset industry at the same time.
VARA: A New Regulator
The Emirate will establish a new regulator to regulate the virtual asset market in Dubai as a first step. The Virtual Asset Regulatory Authority, or VARA, would be the new regulator. It will complete legal and financial independence and affiliated with the Dubai World Trade Centre Authority (DWTCA)
The DWTCA’s Director General is Helal Al-Marri. The Dubai Virtual Asset Regulatory Authority, he claimed, will offer a whole range of VA [virtual asset] services. This is being done in collaboration with the UAE Central Bank and the Securities and Commodities Authority.
VARA will have complete power over the virtual asset industry, including the ability to license, regulate, and administer it. It will have control over both special development zones and free zones. The Dubai International Financial Centre, on the other hand, is working on its own set of virtual asset regulations.
VARA will also be in charge of formulating and coordinating the sector’s regulations and controls. This will comprise virtual asset classification and specification. This also includes the manner in which virtual asset operations will be implemented and maintained. It also covers the manner in which clearing and settlement will take place.
Is it Too Late to Join the Party?
For several years, the UAE has been courting the virtual asset market. Its financial institutions have a track record of experimenting with blockchain technology. This is, however, the first time the country has made an official move to regulate the sector on a large basis.
Since mid-2021, the Dubai Financial Centre has been considering virtual asset regulation, but it is still in the consultation stage. The world’s largest cryptocurrency exchange, Binance, is not licensed in the United Arab Emirates, although it is in Bahrain.
The little island nation sandwiched between two seas is giving the United Arab Emirates a run for its money. When it comes to being a worldwide hub for virtual assets, this is the case. In 2019, Bahrain enacted crypto banking regulations and licensed the first crypto-firm.
In contrast to the central bank of the United Arab Emirates, the central bank of Bahrain accepts cryptocurrency as an official form of payment.
