United Arab Emirates announced approval of First Law to regulate virtual assets


Recently, this
week, the ruler of Dubai who is also Vice President and prime minister of the
United Arab Emirates (UAE), His Highness Sheikh Mohammed bin Rashid Al Maktoum,
announced that Dubai has approved the first of its kind of law in the emirate
that regulates virtual assets. He also revealed that Dubai Virtual Assets
Regulatory Authority (VARA) has been established.
Approving the
virtual asset law and establishing the Dubai Virtual Asset Regulatory Authority
(VARA) is an important step that establishes United Arab Emirates UAE’s position
in this sector as this helps the sector to protect investors. As per the
announcement, VARA is responsible for regulating the trading and issuance of
“virtual assets and virtual tokens.” It is also authorizing and regulating
virtual asset service providers (VASPs).
In adopting this
law, Dubai hopes to play a central role in designing the future of virtual
assets and promoting responsible business growth. As Sheikh Mohammed said in a
statement that to protect investors and provide international standards for
virtual asset industry governance that will promote responsible business growth
in the emirate, there was a need to set up an advanced legal framework. This can
be done through Dubai Virtual Asset Regulation Law. In an official Twitter
account, he said “We established an independent authority to oversee the
development of the best business environment in the world for the virtual
assets in terms of regulation, licensing, governance and in line with local and
global financial systems,”. United Arab Emirates (UAE) is the federation of
seven emirates.
To attract new
businesses UAE is focussing to develop crypto regulations. Security and
Commodity Authority (SCA), the UAE's securities regulator, said Tuesday the
country is moving toward establishing its own crypto asset regulatory
framework.
According to Sheikh Mohammed in the field of virtual assets, Dubai has all the capabilities that qualify it as one of the most important international centers, its advanced legislative environment. He said, "Dubai will provide the most advanced virtual asset ecosystem in terms of organization, governance, and security.” Sheikh Mohammed previously held the positions of head of Dubai Police and Public security, along with the minister of defense.
About VARA
The VARA
or Dubai Virtual Assets Regulatory Authority is an affiliate body of the Dubai
World Trade Centre. This body will supervise and regulate the regulations and
disclosures. In emirate, exchange services between one or more forms of virtual
assets including future growth of virtual assets will be monitored and
regulated by the authority. Issuing licenses to virtual asset service providers
and the highest standard of protection for the personal data of beneficiaries will be
performed by this body.
In addition, the
law mandates that the authority is responsible for establishing and enforcing
the rules and controls that govern virtual asset transactions. This includes
management services, clearing and settlement services, along classifying
and specifying types of virtual assets. Furthermore, companies that provide
crypto transfer, custody, and management services are regulated by the new law.
The platforms that offer crypto trading exchange between cryptocurrencies and
fiat currencies and between one or more cryptocurrencies need to go through
VARA authorization and regulation.
Except for the
state-owned financial free zone DIFC, this new law is applicable throughout
Dubai. DIFC’s regulator is Dubai Financial Services Authority (DFSA) which is
working on its own cryptocurrency regulation.
VARA
authorization monitors various activities which include Operating and managing
virtual assets platforms services; Exchange services between virtual assets and
currencies, whether national or foreign; Virtual asset transfer services;
Virtual asset custody and management services; Services related to the virtual
asset portfolio; Services related to the offering and trading of virtual
tokens. In order to conduct virtual asset activities in Dubai, one must
establish a physical presence.

Indrani bose
CBW - External Analyst
INDIA