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DUBAI VIRTUAL ASSETS REGULATION LAW

Context

Dubai has become the latest country to regulate crypto assets, joining Singapore, the United States, the United Kingdom, El Salvador, and other countries that have done so. Dubai has established the Virtual Asset Regulation Law to control this new-age business, quickly growing.

Key Points

In addition, an independent regulator has been established to oversee the cryptocurrency industry.

The Dubai Virtual Assets Regulatory Authority (VARA), a regulatory agency, will supervise the virtual asset business environment's licencing, regulation, and governance.

The Dubai Virtual Asset Regulation Law intends to position Dubai and the United Arab Emirates as regional and worldwide destinations for the virtual asset business.

What actions must be taken under the new legislation?

Residents of Dubai will be required to register with VARA before engaging in crypto-related activities under the new regulation. Virtual asset-related businesses would also need to register. These firms include cryptocurrency exchanges, companies that allow bitcoin transfers, etc. 

The new law will apply throughout Dubai, except the government-owned DIFC financial-free zone. The Dubai Financial Services Authority (DFSA), the DIFC's regulator, is working on its virtual asset legislation. 

Virtual Assets Regulatory Authority
VARA will be in charge of regulating and licencing the sector across the free zone territories and the mainland, with the exception of the Dubai International Financial Centre (DIFC). The authority will be in charge of designing and arranging the procedures and norms that will regulate VA activities like clearing, management, and settlement services and defining and classifying virtual asset kinds. VARA will also provide a broad range of services in partnership with the UAE Central Bank and the Securities and Commodities Authority. 

What are Virtual Assets?

A virtual asset is any digitised token of value that may be traded, transferred, or used for payment. Virtual assets do not contain the digital representation of fiat currency. The most popular digital assets are non-fungible tokens (NFTs) and cryptocurrencies.

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