The Dubai Digital Asset Law, A Step Towards Achieving The UAE Dream
It is evident that the attributes of vision, mission, and goals are not limited to people alone but also to nations. The United Arab Emirates, Dubai, has made sure the world knows that it has a set mission when it comes to technology, one of which is being a national tech hub. To bring this mission to life the nation has embraced a lot of technological development in various sectors. There have been several policies and investments made by the UAE government to encourage the development of technology. Of all the policies, the most recent is the Virtual Asset Regulation Law and Regulation Authority which became effective on the 15th of January 2023.
The recent introduction of the Dubai Virtual Asset Regulation Law and the Dubai Virtual Assets Regulatory Authority (VARA) is a significant addition to the financial services sector in the United Arab Emirates. This new law and regulatory body are set to provide a comprehensive framework for the regulation of virtual assets and related activities, ensuring the safety and security of investors.
The VARA was also established to create an international government standard for the regulation of the virtual assets and digital currencies sector. This has the tendency to encourage the development of responsible activities and growth under judicious regulations.
With past experience, the UAE government follows a step-by-step or “related to” decision with technology. The latest enacted law is in line with some of the strategies the nation curated for its Securities and Exchange Higher Committee.
The enactment of the VARA continues to position the UAE as the first choice for global expansion, in this case, an encouraging location for emerging digital asset businesses. This will also propel the adaptation of virtual assets and blockchain activities within the region, resulting in potential economic growth.
The law will oversee the activities of the following, subjecting it to the authorization of VARA
- Operation and the management of virtual assets platforms services
- The Exchange services between virtual assets and currencies, be it national or foreign exchange services between one or more forms of virtual assets
- Virtual asset transfer services
- Virtual asset custody and management services
- Services related to the virtual asset portfolio
- Services related to the offering and trading of virtual tokens
- The acts that constitute a violation of the provisions of this law and its related decisions, and the fines imposed on a violator, shall be determined by a decision issued by the board of directors of the Dubai World Trade Centre
- In addition to the penalty of a fine, the VARA may take any of the following measures against the violator: to suspend the permit for a period not exceeding six months, cancel the permit, and coordinate with the competent commercial licensing authority in Dubai to cancel the commercial license.
The UAE which had recently launched the metaverse strategy and also the museum of the future is focused on being a global phenomenon in technology. The introduction of the Dubai Virtual Asset Regulation Law and VARA is a significant step forward in the development of the UAE’s financial services sector.