Dubai Virtual Assets Regulatory Authority to Regulate Digital Assets

Dubai Virtual Assets Regulatory Authority to Regulate Digital Assets

 

The exploding popularity of cryptocurrency has compelled governments to review and act quickly to examine the risks and benefits of digital assets. This news has come at a time when some experts speculated that Kremlin could use cryptocurrencies to evade sanctions imposed by the West. Sheikh Mohammed, the ruler of Dubai who is also the vice president and prime minister of United Arab Emirates (UAE), which comprises of seven emirates has moved ahead in this direction to end the use of the borderless currency by financial criminals, drug cartels, arms traders, terror organisations and tax cheats.

Dubai has adopted its first law to regulate the crypto sector. It has also established a dedicated regulator to oversee all the crypto activities and related service providers. The first virtual assets law has been adopted in Dubai, and the Dubai Virtual Assets Regulatory Authority (VARA) has been founded, according to Sheikh Mohammed bin Rashid Al Maktoum's official Twitter account.

‘The goal is to establish the UAE and Dubai’s position as a key player in designing the future of virtual assets globally,’ his Twitter handle stated.

Sheikh Mohammed, the ruler of Dubai,  who is also the vice president and prime minister of the United Arab Emirates (UAE), which comprises of seven emirates. He has earlier served as the head of the Dubai Police and Public Security Department, as well as the Minister of Defense, said this is the first of its type to control virtual assets. Speaking on the occasion, he said,

'We formed an independent authority to monitor the establishment of the greatest business climate in the world in terms of regulating, licensing, and governance.’

In terms of legislation, licensing, and governance, we formed an independent authority to monitor the development of the best business climate in the world. The Dubai Virtual Asset Regulatory Authority is in charge of monitoring the trade and issuance of "virtual assets and virtual tokens," according to the release. It's also in charge of approving and overseeing all the virtual asset service providers (VASPs) too.

The authority has been mandated to ensure that "the highest standards of protection for beneficiaries' personal data" are met with due diligence. There is emphasis to avoid price manipulation and speculation and strict monitoring of all the virtual asset transactions.

Dubai Virtual Assets Regulatory Authority (VARA) is now the authority and regulator for all crypto trading platforms that offer exchanges between cryptocurrencies and fiat currencies, as well as between one or more cryptocurrencies. Companies that provide crypto transfer, custody, and management services are also subject to the new regulations.

Except for the state-owned financial free zone DIFC, the new law will apply across Dubai. The DIFC's regulator, the Dubai Financial Services Authority (DFSA), is working on its own cryptocurrency regulations.

To encourage new firms, the UAE has been pushing for the development of crypto legislation. The Securities and Commodities Authority (SCA), the UAE's securities regulator, said on Tuesday that the country is getting closer to establishing its own crypto regulatory framework.