Dubai has adopted its first law to regulate the cryptocurrency sector. It has also established a dedicated regulator to oversee crypto activities and related service providers.

Regulated crypto sector in Dubai

The emirate of Dubai adopted its first law to regulate crypto assets and established a regulator to oversee crypto activities and regulate crypto service providers.

The official Twitter account of Sheikh Mohammed bin Rashid Al Maktoum announced on Wednesday that the first virtual assets law in Dubai has been passed and the Dubai Virtual Assets Regulatory Authority (VARA) has been established.

Sheikh Mohammed commented:

The goal [is to] establish the position of the United Arab Emirates and Dubai as a key player in shaping the future of virtual assets globally.

Dubai’s ruler, Sheikh Mohammed, is also vice president and prime minister of the United Arab Emirates (UAE), a federation of seven emirates. He previously held the positions of chief of the Dubai Police and Public Security, as well as minister of defence.

Noting that this law is the first of its kind to regulate virtual assets, Sheikh Mohammed opined:

We established an independent authority to oversee the development of the best business environment in the world… in terms of regulation, licensing, [and] governance.

According to the announcement, the Dubai Virtual Assets Regulatory Authority is tasked with overseeing the trading and issuance of “virtual assets and virtual tokens.” It is also responsible for licensing and regulating Virtual Asset Service Providers (VASPs).

In addition, the authority must guarantee the “highest standards of protection of the personal data of the beneficiaries.” You should also monitor virtual asset transactions to prevent price manipulation.

Crypto trading platforms offering exchange between cryptocurrencies and fiat currencies and between one or more cryptocurrencies are subject to VARA authorization and regulation. In addition, companies that offer cryptocurrency transfer, custody, and management services are regulated by the new law.

The new law will apply throughout Dubai, except for the DIFC state financial free zone. The Dubai Financial Services Authority (DFSA), the DIFC regulator, is working on its own cryptocurrency regulation.

The United Arab Emirates has been pushing to develop crypto regulations to attract startups. Its securities regulator, the Securities and Commodities Authority (SCA), said on Tuesday that the UAE as a whole is getting closer to the launch of its own regulatory framework for crypto assets.

What do you think about Dubai starting to regulate the cryptocurrency sector? Let us know in the comments section.

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