Dubai has enacted a new cryptocurrency law to govern cryptocurrency activity in the area. The city has also formed the Dubai Virtual Assets Regulatory Authority (VARA) to govern the country’s cryptocurrency business.
VARA was established as an independent authority under the Dubai World Trade Center (DWTC) for digital assets management.
Sheik Mohammed bin Rashid Al Maktoum, the prime minister of the United Arab Emirates (UAE), disclosed the new development via a tweet
“Today, we approved the virtual assets law and established the Dubai Virtual Assets Regulatory Authority. This is a step that establishes the UAE’s position in this sector. The Authority will cooperate with all related entities to ensure maximum transparency and security for investors.”
The Functions of VARA
VARA will be responsible for the regulation, governance and issuance of cryptocurrencies, NFTs and other virtual assets. It will also supervise and monitor crypto platforms, exchanges and management services, making sure they operate under the rules and regulations of the financial regulators.
Additionally, the new crypto watchdog forbids individuals from engaging in crypto activities without proper authorization. However, those interested in engaging in digital assets must first establish a presence in Dubai.
According to Maktoum, the country wants to establish Dubai as a “key player in designing the future of virtual assets globally.”
More Crypto Grounds
Meanwhile, Dubai’s new crypto regulatory framework has been in the works since last year.
In December 2021, the Dubai media office announced that the Dubai World Trade Center (DWTC) would officially become a crypto zone and also regulate other virtual assets as well as crypto trading companies in the country.
At the time, the city media stated that a very strict plan has been put in place to combat the funding of terrorism, investor protections and anti-money laundering.
In September 2021, the United Arab Emirates (UAE) Securities and Commodities Authority together with the Dubai World Trade Center Authority (DWTCA) organized a panel that allows the DWTCA to approve all financial transactions relating to cryptocurrency.
These regulatory moves show just how Dubai is preparing to establish its presence in the cryptocurrency sector. The country is quite popular and has gained favors among the web3 community.
