Dubai adopted its first Virtual Asset Regulation Law. The provisions of this law are applicable throughout the Emirate, including special development zones and free zones, except for the Dubai International Financial Centre. The new law seeks to protect investors and establish a framework of international standards for virtual asset (VA) industry governance to promote responsible business growth.
Virtual Assets in the UAE
The Regulation of virtual assets has been a topic of debate globally for some time. UAE is one of the few countries that embrace the crypto culture while the rest of the world is still skeptical about its legitimacy. VA’s have been popular in the UAE for quite some time and now that regulations are coming into place, it will help support the country’s aim in becoming a global crypto hub. The government has announced in February that it is preparing to issue federal licenses for virtual assets service providers (VASPs) by the end of the quarter.
Implementation of the new law
The Dubai Virtual Asset Regulatory Authority will oversee the development of the business environment for virtual assets in terms of regulation, licensing, and governance. It is prohibited for any person to engage in activities without VARA authorization. Those who are willing to practice any of the VA activities must establish a presence in the UAE.
Activities subject to the authorization and control of the authority:
· Operating and managing virtual assets platforms
· Exchange services between virtual assets and currencies
· Exchange services between one or more forms of virtual assets
· Virtual asset transfer services
· Virtual asset custody and management services
· Virtual asset management services.
The Virtual Asset Regulation Law will come into force from the date of its publication in the Official Gazette.