Dubai just became the latest country to introduce regulation for the cryptocurrency industry. They have also taken steps to select a dedicated regulator that will oversee crypto-related activities and other service providers. The first law for regulating cryptocurrencies has been adopted by the emirate of Dubai for this purpose. One Wednesday, Sheikh Mohammed bin Rashid Al Maktoum’s official twitter account made the announcement about the approval of the first virtual assets law and the founding of the Dubai Virtual Assets Regulatory Authority (VARA). Sheikh Mohammed stated that their goal was to establish the position of Dubai and the UAE as key players in determining the future of these digital assets globally.
Not only is he the ruler of Dubai, but Sheikh Mohammed also serves as the prime minister and vice president of the United Arab Emirates (UAE), which is a federation that comprises of seven emirates. He had held other positions previously, which included the minister of defense and the head of the Dubai Police and Public security. He also noted that the law they have introduced for regulating virtual assets is the first of its kind. He stated that they were launching an independent authority for ensuring that they could offer the best business environment globally, in terms of licensing, regulation and governance.
The Dubai Virtual Asset Regulatory Authority has been established with the purpose of monitoring the issuance and trading of virtual tokens and virtual assets. It will also have the responsibility of regulating and authorizing virtual asset service providers (VASPs). Furthermore, the authority would also need to maintain the highest standards of protection for the personal data of the beneficiaries. All virtual asset transactions would also have to be monitored by the authority in order to eliminate the possibility of price manipulation.
VARA regulation and authorization would be required of all crypto trading platforms that offer exchange services between fiat currencies and cryptocurrencies, as well as between one or more cryptocurrencies. Likewise, the new law would also regulate companies that offer crypto custody, transfer and management services. This new law would be applicable all over Dubai, but DIFC would be an exception because the financial free zone is state-owned. The DIFC is regulated by the Dubai Financial Services Authority (DFSA) and it is working on coming up with its own crypto regulation.
The United Arab Emirates has been making a strong push when it comes to developing cryptocurrency regulation because they want to attract new businesses. The Securities and Commodities Authority (SCA), which is the UAE’s securities regulator, announced on Tuesday that they were moving closer to introducing a regulatory framework that would be applicable to cryptocurrencies and digital assets. The need for regulation has become evident globally because of the popularity and expansion of the crypto industry. An executive order was also recently issued by the President of the United States, Joe Biden, which is also aimed at developing regulation for the crypto industry in the country. Other countries around the world are also taking similar action.