Following the vision of the leadership of the Gulf country to make the UAE a hub for crypto and other digital-related financial services, Dubai has taken another move towards bringing the dream of the kingdom to reality.
The latest action by the ruler of Dubai, Sheikh Muhammad Bin Rashid Al-Maktoum, is geared toward establishing the UAE, and Dubai in particular, as a key player in creating and developing virtual assets worldwide.
Dubai Crypto Regulation
The top emirate of the UAE has just passed its first law to regulate the activities of cryptocurrencies and related assets in Dubai. It has established a regulatory agency mandated by the emirate to oversee crypto activities and handle the mode of operation of crypto operation service providers.
According to the official Twitter account of Al-Maktoum, the first virtual asset regulation has already been approved in Dubai, followed by the announcement of the establishment of the Virtual Assets Regulatory Authority (VARA).
Dubai’s ruler is one of the top decision-makers among the United Arab Emirates’ seven-member state emirates and makes remarks about the law. The law is the first of its kind across the UAE to regulate virtual assets. According to Al-Maktoum, establishing an independent authority to oversee the creation of one of the most friendly business spaces globally in terms of governance, regulation, and licensing is a remarkable feat for the Gulf country.
Under its mandate, the VARA’s role is to oversee the transactions and issuance of virtual funds throughout the emirate. Additionally, it is also tasked with authorizing and regulating the operations of virtual asset providers.
Most importantly, the authority ensures that investors and beneficiaries of digital currencies are protected by safeguarding their data. Monitoring virtual asset transactions is within its jurisdiction to detect and prevent price manipulation on the trading floor.
Aim of The New Law
Even before the coming of the law into effect, Dubai has been working on creating a positive environment for crypto-related services and businesses to flourish through world-class regulations.
As such, the latest law is to subject every crypto trading platform offering exchange services between cryptocurrencies and fiat currencies or between multiple cryptos to VARA regulation. Likewise, firms offering cryptocurrency transfer and other digital currency management services are subjected to the new law.
The latest official regulation is applicable throughout Dubai but does not include specific locations designated as state-owned financial-free zones. As part of its move to regulate virtual asset activities, the Dubai Financial Services Authority is currently working on its version of crypto regulation.
Before the latest announcement, the UAE developed and implemented crypto regulations to attract more international blockchain players to the Gulf nation. The Securities and Commodities Authority announced last Tuesday that the UAE is inching closer toward launching its crypto regulatory framework for the cryptocurrency and blockchain industry.
Early in the year, the Gulf nation signed a deal with the world’s leading crypto exchange platform, Binance, to develop the sector in Dubai and enhance its operations.