Dubai Constructs Virtual Assets Framework

https://www.finextra.com/pressarticle/95755/dubai-constructs-virtual-assets-framework

Dubai’s Virtual Asset Regulatory Authority (VARA) has launched its Virtual Assets and Related Activities Regulations 2023, setting out a comprehensive Virtual Asset Framework to support economic sustainability and cross-border financial security.

The framework will provide regulatory certainty for the market by mandating gold-standard risk assurance and Anti-Money Laundering (AML) standards to be applied by licensed entities in Dubai. The seven licensed VA activities under the VARA regime include Advisory services, Broker-Dealer services, Custodial services, Exchange services, Lending-Borrowing services, Payments and Remittances services, and VA Management and Investment services. Issuance is also a regulated activity under the VARA regime to allow consumers to make more informed decisions on new tokens launched in Dubai and the associated obligations of the issuer.

His Excellency Helal Saeed Almarri, Director General Dubai’s Department of Economy & Tourism and Chairman of VARA’s Executive Board, said: “Dubai’s D33 Economic Plan has outlined our mission to establish the Emirate as the capital of the Future Economy anchored by Metaverse, AI, Web3.0 and Blockchain. In Q1-2022, VARA was launched as the world’s only independent and specialist regulator for Virtual Assets to serve as the accelerator for a truly borderless Digital Economy. Ahead of its first anniversary since establishment, VARA launches the first-of-its-kind VA framework structured to accelerate our New Economy agenda, augmenting secure, and sustainable ‘global’ market growth. This custom-designed construct reflects UAE’s commitment to building responsible safeguards, and Dubai’s confidence in delivering a progressive VA ecosystem that nurtures next-gen innovation.”

According to Almarri, the VA Framework is designed to accelerate the New Economy agenda, augment global market growth, and reflect the UAE’s commitment to building responsible safeguards. VARA will provide VA oversight across Dubai, except for the Dubai International Financial Centre (DIFC), to facilitate VA-associated economic stability, investor protection, and jurisdictional resilience.

Existing MVP Operational license applicants, legacy UAE-based Virtual Asset Service-Providers (VASPs), and new market entrants will have a route towards full FMP licensing, and all VASPs offering VA services to the Dubai market prior to the publication of the FMP Regulations will be required to register with VARA and become fully compliant with the final rules. Any breach of this condition will be subject to regulatory action.

The full Virtual Assets and Related Activities Regulations 2023 will be available on vara.ae.