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Wednesday, March 22, 2023

Dubai’s VARA Issues Specific Regulations for Virtual Assets

Dubai’s VARA Issues Specific Regulations for Virtual Assets

Dubai’s Virtual Assets Regulatory Authority (VARA) has released the Virtual Assets and Related Activities Regulations 2023, setting out a broad virtual asset (VA) framework that emphasizes economic sustainability and cross-border financial security.

The UAE has been working to keep these drivers safe, updating its oversight and regulatory approach, and addressing global money laundering (ML) and terrorist financing (TF) risks arising from the potential misuse of new technologies.

The VA framework is structured to provide regulatory certainty – giving the market greater clarity on the expected level of operator liability. It also requires licensed entities within the emirate to adopt gold standard risk assurance and anti-money laundering (AML) standards.

future economy

Helal Saeed Almarri, Director General, Dubai Department of Economy and Tourism and Chairman of VARA Executive Committee, said: “Dubai’s D33 Economic Plan outlines our mission to build the emirate into the capital of a future economy based on Metaverse, AI, Web3.0 and regional Blockchain.In the first quarter of 2022, VARA was launched as the world’s only independent and professional regulator of virtual assets as an accelerator for a truly borderless digital economy.

“On its one-year anniversary, VARA has launched the first-ever VA framework to accelerate our new economic agenda and foster safe, sustainable ‘global’ market growth. This custom-designed structure reflects the UAE’s commitment to building responsible commitment to safeguards and Dubai’s confidence in delivering an advanced VA ecosystem to foster the next generation of innovation.”

As the Authority is mandated to provide VA oversight throughout the Emirate of Dubai [except DIFC], VARA will promote VA-related economic stability, investor protection, and judicial resiliency. The new regulations cover the full range of seven licensed VA activities – advisory services, broker-dealer services, custody services, transaction services, lending services, payment and remittance services, and VA management and investment services.

a wise decision

Additionally, issuance is a regulated activity under the VARA regime, allowing consumers to make more informed decisions about new tokens launching in Dubai and the related obligations of issuers.

Existing MVP Operating License Applicants [and holders of either the Provisional or Preparatory MVP licenses]traditional UAE-based Virtual Asset Service Providers (VASPs) and new market entrants will gain access to a full FMP license.

All VASPs providing VA services to the Dubai market prior to the publication of the FMP regulations will need to be registered with VARA and be fully compliant with the final rules. Any breach of this condition will be subject to regulatory action. — trade arab news agency

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