Starting from August 31, 2023, all cryptocurrency businesses in Dubai will have to comply with the regulations issued by the Virtual Assets Regulatory Authority (VARA), the world’s first independent regulator for virtual assets. The move aims to protect investors, maintain high levels of risk assurance and facilitate virtual asset innovation in the emirate.
VARA, which was established in 2022, is responsible for regulating and overseeing the provision, use and exchange of virtual assets in and from Dubai. Virtual assets include cryptocurrencies such as Bitcoin, Ethereum and others, as well as tokens, stablecoins and digital securities.
According to VARA, any business that engages in virtual asset activities, such as trading, custody, issuance, brokerage, margin trading or OTC offerings, must obtain a license from the authority and follow its rules and guidelines. These include complying with anti-money laundering and counter-terrorism financing measures, implementing robust governance and risk management frameworks, ensuring adequate capital and liquidity levels, and providing fair and transparent disclosure to customers and investors.
VARA also publishes a list of licensed virtual asset service providers (VASPs) on its website, which currently includes 12 entities. One of them is Crypto.com, a leading cryptocurrency exchange and payment platform that received a preparatory license from VARA in June 2022. Crypto.com plans to offer a comprehensive range of institutional services in Dubai, such as custody, trading, lending and staking.
The regulation of virtual assets in Dubai is part of the emirate’s vision to become a global leader in the digital economy. By establishing international standards for virtual assets, VARA aims to ensure that Dubai maintains and further strengthens its position as a hub for innovation and finance. VARA also collaborates with relevant local and global financial regulatory authorities to facilitate cross-border operations and security.
The regulation of virtual assets in Dubai is expected to boost the confidence and adoption of the industry among both businesses and consumers. Whether using Bitcoin to buy a home or settle a bill, all transactions will come under a transparent and trusted regulatory framework that protects the rights and interests of all parties involved.