Leaders of Dubai’s Virtual Assets Regulatory Authority (VARA) reveal a groundbreaking pragmatic approach to crypto, establishing comprehensive rules for virtual asset service providers (VASPs). What does this mean for companies in the blockchain and crypto industry?
VARA sets a global precedent for crypto compliance
The Virtual Assets Regulatory Authority (VARA) of Dubai recently published comprehensive guidelines on crypto regulation establishing a level playing field for crypto Virtual Asset Service Providers (VASP) operating in the emirate.
Key executives of VARA revealed Dubai’s “pragmatic” approach to regulating crypto an approach that the rest of the world will be watching closely.
Created less than a year ago, the VARA quickly formulated a solid regulatory framework for the nascent crypto industry. Its guidelines include 12 rulebooks covering all aspects of virtual asset activities, from brokerage and advisory services to token offerings. VARA has adopted a progressive approach first by imposing mandatory registration of VASP and then requiring licenses for higher-risk activities.
These requirements impose a clear statement: Dubai welcomes crypto, but with strict safeguards. Virtual Assets Regulatory Authority (VARA) ensures that only reputable companies operate in the emirate, in order to inspire consumer and investor confidence.
Contrary to preconceptions, it is no longer the far west like in the early days when regulation didn’t yet exist. But how do you set up a crypto business?
Discover the importance of specialized crypto free zones in Dubai
Dubai is also banking on ”Special Development Zones” (SDZ) dedicated to virtual assets, including Dubai International Financial Center. These free zones offer crypto pioneers the opportunity to experiment in a secure regulatory environment, while benefiting from careful supervision.
For the VARA, the SDZ are living laboratories, providing crucial data for refining crypto policies. In addition, for businesses, these zones provide a fertile ground for product development prior to large-scale launch. This symbiotic relationship, with specialized free zones on one side and a collaborative regulatory body on the other, is what characterizes Dubai.
This approach contrasts, for example, with the approach in the European Union, where regulation seems to be the priority to the detriment of innovation and entrepreneurship. Will Dubai emerge by 2030 as one of the international leaders in this technological transformation, of which blockchain is pivotal?
Dubai’s Virtual Assets Regulatory Authority expands into emerging sectors
While the first regulations of VARA focus on basic crypto-related activities, attention is now turning to fast-growing niche areas such as Decentralized Finance (DeFi) and the metaverse.
The VARA strives to connect these innovative sectors with the crypto ecosystem, in line with Dubai’s ambitious metaverse strategy. The aim is to foster the development of over 1,000 metaverse businesses by 2030.
By adapting policies to the unique specifics of DeFi, NFTs and other revolutionary innovations, while encouraging interoperability, VARA aims to make Dubai a global hub for all emerging facets of the digital economy.
With its balanced, evolving and collaborative approach, Dubai is poised to become a world leader in crypto regulation. Guided by VARA’s example, other jurisdictions may draw inspiration from the emirate’s way of encouraging responsible innovation and also position themselves in this dynamic market.
Following this pioneering initiative, will the Virtual Assets Regulatory Authority become an international benchmark for compliance?
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.