Dubai has come up with a regulatory framework for virtual assets (VA) and related activities.
The emirate's Virtual Asset Regulatory Authority (VARA) said the framework is designed to offer regulatory certainty, allowing the market to have greater clarity on the expected level of operator responsibility.
It also mandates gold-standard risk assurance and Anti-Money Laundering (AML) standards to be applied by licensed entities within the emirate.
In Q1 2022, VARA was launched as the world's only independent and specialist regulator for Virtual Assets to serve as the accelerator for a borderless digital economy.
Helal Saeed Almarri, Director General of Dubai’s Department of Economy & Tourism, and Chairman of VARA’s Executive Board said: "Dubai’s D33 Economic Plan has outlined our mission to establish the Emirate as the capital of the Future Economy anchored by Metaverse, AI, Web3.0 and Blockchain."
"Ahead of its first anniversary of establishment, VARA launches the first-of-its-kind VA framework structured to accelerate our New Economy agenda, augmenting secure, and sustainable ‘global’ market growth. This custom-designed construct reflects UAE’s commitment to building responsible safeguards, and Dubai’s confidence in delivering a progressive VA ecosystem that nurtures next-gen innovation," he added.
Dubai’s VARA,has issued its Virtual Assets and Related Activities Regulations 2023.The Regulations set out a comprehensive Virtual Asset (VA) Framework built on principles of economic sustainability & cross-border financial security. https://t.co/XXDPdktpuY pic.twitter.com/MdVPgSW5AT— Dubai Media Office (@DXBMediaOffice) February 7, 2023
As the authority mandated to provide VA oversight across the Emirate of Dubai [except DIFC], VARA will facilitate VA-associated economic stability, investor protection, and jurisdictional resilience.
The new regulations span seven licensed VA activities - advisory services, broker-dealer services, custodial services, exchange services, lending-borrowing services, payments and remittances services, and VA management and investment services.
Issuance is also a regulated activity under the VARA regime, to allow consumers to make a more informed decision on new tokens being launched in Dubai, and the associated obligations of the issuer.
Existing minimum viable product (MVP) operational licence applicants [and holders of either the provisional or preparatory MVP licences], legacy UAE-based Virtual Asset Service-Providers (VASPs), and new market entrants will be provided with a route towards full market product licensing (FMP).
All VASPs offering VA services to the Dubai market prior to the publication of the FMP regulations will be required to register with VARA and become fully compliant with the final rules. Any breach of this condition will be subject to regulatory action.