Dubai has passed its first crypto asset regulation law and formed a regulator to supervise the crypto activity and regulate crypto service providers.
The first virtual assets law was adopted in Dubai, and the Dubai Virtual Assets Regulatory Authority (VARA) was founded, according to Sheikh Mohammed bin Rashid Al Maktoum’s official Twitter account.
Sheikh Mohammed said: the objective is to promote the UAE and Dubai as essential players in shaping the global future of virtual assets.
Sheikh Mohammed, the ruler of Dubai, is also the vice president and prime minister of the United Arab Emirates (UAE), which comprises seven emirates. He formerly served as the head of the Dubai Police and Public Security Department and the Minister of Defense.
Sheikh Mohammed remarked that this is the first law of its sort to control virtual assets: In terms of legislation, licensing, and governance, we formed an independent body to monitor the creation of the most significant business climate in the world.
According to the release, the Dubai Virtual Asset Regulatory Authority is in charge of monitoring the trade and issue of “virtual assets and virtual tokens,” according to the release. It’s also in charge of approving and overseeing virtual asset service providers (VASPs).
The authority must also guarantee that “the highest standards of protection for beneficiaries’ personal data” are met. To avoid price manipulation, it must also keep track of virtual asset transactions.
VARA authorizes and regulates crypto trading platforms that enable exchanges between cryptocurrencies and fiat currencies and between one or more cryptocurrencies. The new law also regulates organizations that provide crypto transfer, custody, and management services.
Except for the state-owned financial free zone DIFC, the new rule will apply across Dubai. The DIFC’s regulator, the Dubai Financial Services Authority (DFSA), is working on its own cryptocurrency regulations.
To encourage new firms, the UAE has been pushing for the development of crypto legislation. The Securities and Commodities Authority (SCA), the UAE’s securities regulator, said Tuesday that the country is coming closer to establishing its own crypto regulatory framework.