Dubai introduces new crypto law and regulatory authority
Dubai’s ruler Sheikh Mohammed Bin Rashid revealed a new crypto asset regulation and an independent regulatory authority to govern virtual assets and regulate the cryptocurrency sector. The Dubai Virtual Asset Regulation Law and the Dubai Virtual Assets Regulatory Authority (VARA) would oversee the growth of virtual asset business environment including regulation, governance and licensing.
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Under the new regulation, virtual asset-related businesses and Dubai residents would need to register with VARA before engaging in crypto-related activities under the new law, according to a report by Business Today. The businesses that fall under the purview of the law include cryptocurrency exchanges, businesses facilitating cryptocurrency transfers and the like. There is no clarity on which crypto assets will need to follow these regulations.
Sheikh Mohammed Bin Rashid hailed the development as an essential step to protect the growing market of virtual assets in the region.
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However, a government-owned DIFC financial-free zone would be exempted from this regulation. This is because the Dubai Financial Services Authority (DFSA) is developing its regulations for the virtual asset market to be applied in DIFC.
“The latest data released by The Dubai Multi Commodities Centre (DMCC)- one of the innovation hubs and the largest free-trade zone in UAE, shows that out of 3,049 new businesses registered in Dubai in 2022, more than 500 businesses were crypto startups,” says Mahin Gupta, Founder of Liminal, a digital wallet infrastructure platform.
“Abu Dhabi Global Market (ADGM) has also emerged as a truly revolutionary jurisdiction that provides certainty for and responds to regional and international players seeking opportunities to establish and grow their regulated Virtual Assets activities. The establishment of these digital assets and VA regulatory frameworks has placed the UAE on the map as a regional and global virtual assets trading centre and blockchain hub,” he added.
MENA is projected to be one of the fastest-growing markets in terms of crypto. Between July 2021 and June 2022, the region accounted for almost 9.2% of the global digital assets transactions, a report by Chainanalysis found.
