The UAE has enacted its first law governing digital assets and established a regulatory agency for the sector.
The Dubai Virtual Asset Regulation Law positions Dubai as a leader in emerging technologies such as cryptocurrency and blockchain. The Dubai Virtual Assets Regulatory Authority has been established to promote security and transparency for crypto investors.
Tasks for Dubai Virtual Asset Authority
- Organising, issuing, and trading of virtual assets and virtual tokens
- Organising and authorising virtual asset service providers
- Ensure the highest standards of protection for beneficiaries’ personal data
- Organising the operation of VA platforms & portfolios
- Monitor transactions and prevent virtual asset price manipulation
The various activities are subject to the authorisation and control of the authority
- Operating and managing virtual assets platforms
- Exchanging services between one or more forms of virtual assets
- Virtual asset custody and management services
- Exchange services between virtual assets and currencies
- Virtual asset transfer services
- Virtual asset management services
Meaning of Dubai Virtual Asset Regulation Law
The Virtual Assets Law currently applies only in the emirate of Dubai, including most free zones such as the Dubai Multi Commodities Centre (DMCC).
However, the law does not apply to the Dubai International Financial Centre (DIFC), which is governed by its own regulations under the Dubai Financial Services Authority (DFSA).
The DFSA has announced plans to introduce its own cryptocurrency regulations for DIFC. Similarly, the Securities and Commodities Authority (SCA) is developing a regulatory framework for cryptocurrencies, which is expected to launch soon.
The new crypto law in the UAE enables the offering and trading of cryptocurrencies such as Bitcoin and Litecoin. It also establishes a legal framework to protect investors and set international standards for crypto, virtual assets, and NFTs.
The VARA framework is designed to foster collaboration, encourage innovation, and prioritise public protection.
Free Zone Permitting Crypto Licensing
Dubai World Trade Centre (DWTC)
DWTC is a free zone dedicated to supporting emerging industries, including virtual assets, cryptocurrency, and blockchain. Established in 2015, it is centrally located in Dubai.
DWTC is working with VARA to become a dedicated zone for regulated virtual asset businesses. The authority is also collaborating with VARA to launch the application process for regulated virtual asset business licenses.
DWTC Authority is equipped to support the growth of the virtual assets ecosystem in Dubai. Many technology companies are choosing this free zone to establish their businesses, making it one of the first comprehensive zones and regulators for virtual assets and crypto.
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