With cryptocurrencies emerging as the trendiest option for investors, governments are planning to reap the benefits of growth wired through a well-designed regulatory structure. The latest news in this regard is coming from UAE where the honorable PM Sheikh Mohammed bin Rashid Al Maktoum has announced to formulate a new law dedicated to virtual assets along with the creation of a regulatory organization to support the vision of the UAE ruler. The newly-implemented statute will play a significant role in governing the growing community of crypto users in the country.
On Wednesday, the PM made an official announcement highlighting the issuance of the highly-anticipated crypto law. The law will provide a well-planned regulatory infrastructure for crypto dealing, trading, and exchange in the Emirate of Dubai. Presented with an aim to safeguard the interests of crypto investors, the statute strives to offer a warranted international standard structure easing governance within the industry.
The ruler mentioned setting up a powerful regulatory authority called Dubai Virtual Asset Regulatory Authority or VARA that will control and manage the governance of the crypto cluster in the region. VARA will have the power to enforce in the Emirate’s special development and free zones with the exception of the Dubai International Financial Centre. Sheikh added that the potential law and the creation of VARA is a strategic step to strengthen the hold of the UAE in the domain. It is a prominent initiative to expand the sector and safeguard the interests of the investors.
Today, we approved the virtual assets law and established the Dubai Virtual Assets Regulatory Authority. A step that establishes the UAE’s position in this sector. The Authority will cooperate with all related entities to ensure maximum transparency and security for investors. pic.twitter.com/LuNtuIW8FM
— HH Sheikh Mohammed (@HHShkMohd) March 9, 2022
As part of the guidelines in the law, the natives of Dubai will require to register with VARA before getting involved in crypto operations. The businesses involved in virtual assets should strive to make a presence in the country. The list of crypto-related activities includes managing a crypto exchange, executing crypto transfers, and services pertaining to the trading of such assets. The announcement did not clearly mention the list of cryptocurrencies falling under the law. The VARA will classify and specify the crypto assets along with the imposition of controls on the sector. Those not abiding by the rules shall be entitled to fines or suspension of their work licenses. The BOD of the Dubai World Trade Centre will decide the actions to be taken in case of disregard of the law.
The impact of the legal framework in free zones like the Dubai World Trade Centre is still not clear. The CEO of Binance, Changpeng Zhao has applauded the creation of VARA by the PM and stated that the entity will help to regulate cryptocurrencies. The new developments are likely to expand the crypto industry in UAE within the control of a legal regulatory setup.
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