On 9 March 2022, a Dubai-based regulatory authority in the UAE is set to oversee the growth of the business environment for digital assets through regulations, governance, and licensing
Dubai: It’s time for crypto regulation
On Wednesday, 9 March 2022, Dubai joined the ranks of countries like the UK, US, El Salvador, Singapore, and more by introducing crypto-asset regulations. Sheikh Mohammed Bin Rashid, the ruler of Dubai, shared with the public that the Dubai emirate has enacted its first sets of laws created to help govern virtual assets. The new law was accompanied by the formation of an independent regulator tasked with regulating the Dubai cryptocurrency sector.
Whenever a country or jurisdiction introduces crypto-related regulations, it’s always news because countries worldwide are slow to introduce and enact crypto regulations. Dubai has grown to become one of the most important financial capitals worldwide, and when regulations are introduced in Dubai, the financial world pays attention.
During his announcement statement, Sheikh Mohammed Bin Rashid, the ruler of Dubai, shared the following; “Adopting the virtual assets law and establishing the Dubai Virtual Assets Regulatory Authority is an essential step that establishes the UAE’s position in this sector, a step that aims to help the sector grow and protect investors.”
Due to its popularity, it might seem like Dubai is a country, but it’s part of the United Arab Emirates, a federation of seven emirates with Abu Dhabi as its capital, while Dubai is, in more ways than one its commercial center.
Dubai Virtual Assets Regulation Authority
One of the primary aims of the Dubai Virtual Assets Regulation Authority (VARA) is to help solidify Dubai’s place as a regional and global destination for virtual assets. As time goes on, the Dubai VARA will be tasked with overseeing the growth of the virtual assets business environment in the jurisdiction.
For residents of Dubai interested in holding, investing, or trading in crypto, they are now required by law to register with VARA beforehand. Companies interested in carrying out activities related to virtual assets are also required to register with the authority immediately.
The new law applies in most parts of Dubai except the DIFC financial-free zone, a government-owned zone within the city. The DIFC is developing its regulations for virtual assets through the Dubai Financial Services Authority for the special zone. Hopefully, more info will be shared to clarify what crypto assets will fall under this rule.
Is this a welcomed development for crypto assets?
One point that governments worldwide make as to why cryptocurrencies aren’t welcomed in their jurisdiction is their unregulated nature makes them a possible tool for nefarious activities. Admittedly, bad actors have used crypto assets as a tool to finance their damaging activities.
For every occurrence of crypto assets being used for harmful activities, there are millions of occurrences of it being used for humanity’s good. Most crypto stakeholders agree reasonable regulations are needed to aid the general acceptance of this technology while cutting down on bad actors in the space.