- Dubai Virtual Asset Regulatory Authority has been mandated to license and regulate the virtual assets sector both across Dubai Mainland and Free Zone territories (exclusive of DIFC).
- The move is part of the Dubai Securities and Exchange Higher Committee’s bigger picture on crypto-assets adoption.
Dubai is pro-virtual assets, but not without government regulations. His Highness Sheikh Mohammed bin Rashid Al Maktoum, issued the Dubai Virtual Asset Regulation Law. Notably, the virtual assets law is aimed at creating an advanced legal framework to protect investors and set Dubai as a center for technology adoption and growth.
Sheikh confirmed that the country will be a key player in designing the future of virtual assets in the global economy. He noted through a statement;
Today, we are participating in designing the future of virtual assets globally. Dubai will provide the most advanced virtual asset ecosystem in terms of organization, governance, and security,
The cryptocurrency market has burgeoned over the last few years, fueled by global geopolitical instabilities. Moreover, Bitcoin proved its resilience during the beginning of coronavirus. Once again, the asset has proved to be of key importance during times of war as seen in Afghanistan and Ukraine.
Dubai is a key center for growth in the Middle East and the greater Asian market. Thereby making the approval of crypto law a huge milestone in global digital assets adoption.
Approving the virtual asset law and establishing the Dubai Virtual Asset Regulatory Authority is a vital step that establishes the UAE’s position in this sector, a step that aims to help the sector to grow and protect investors,
Notably, the country’s Virtual Asset Regulatory Authority has been mandated to license and regulate the virtual assets sector both across Mainland and Free Zone territories (exclusive of DIFC).
Details of the Dubai Virtual Asset law
According to the law, the provisions of which are applicable throughout the Emirate, including special development zones and free zones, except for the Dubai International Financial Centre, the Dubai Virtual Asset Regulatory Authority (VARA) shall be established. Additionally, the authority has legal personality and financial autonomy and will be linked to the Dubai World Trade Centre Authority (DWTCA).
The move is part of the country’s Securities and Exchange Higher Committee’s bigger picture on crypto-assets adoption. Moreover, the United States securities and exchange commission has indicated that most of the crypto tokens are securities and need to be viewed as such.
Consequently, the country is expected to differentiate different virtual assets depending on their nature of operating. For instance, Bitcoin is to a greater extent viewed as a virtual asset while altcoins that got involved in ICOs, IDO, among other fundraising methods are viewed as securities.
According to Helal Saeed Al Marri, Director-General of DWTCA, global virtual assets investors are poised to venture through Dubai following the law approval and establishment of an authority.
According to the law, it is prohibited for any person in the Emirate to engage in activities without VARA authorization.