On Wednesday, Dubai’s ruler His Highness Sheikh Mohammed bin Rashid Al Maktoum passed a first-of-its-kind law to regulate virtual assets.
His Highness tweeted, “The future belongs to those who design it.”
The new virtual asset law will solidify Dubai’s and the UAE’s position as a regional and global destination for the virtual asset sector by providing the essential laws to safeguard virtual asset investors and users while also attracting investments and enterprises to the UAE.
Adopting the virtual assets law and establishing the Dubai Virtual Assets Regulatory Authority, he added, is a critical step toward establishing a robust digital economy and capitalizing on the benefits of digital transformation.
The digital economy contributes about 4.3 percent to the UAE’s gross domestic product, which is equivalent to Dh100 billion ($27.2bn).
The Dubai Virtual Asset Regulatory Authority (VARA), which will be established under the new law, will regulate the sector throughout the emirate, including special development zones and free zones, but excluding the Dubai International Financial Centre.
The independent authority, established under Dubai World Trade Center Authority, will oversee the regulation, licensing, and governance of virtual assets, non-fungible tokens (NFTs), and cryptocurrencies.
Helal Saeed Al Marri, Director-General of DWTCA, said that the new law and establishing the Authority will enhance the UAE and Dubai’s position in the VA sector and attract VA leaders from all over the world.
The law forbids anyone in the Emirate from engaging in activities without the approval of Dubai VARA, the Emirate’s authorized agency for regulating, supervising, and controlling virtual asset services.
Anyone who wishes to practice any of the VA activities must establish a presence in Dubai to conduct business.
Organizing issuance and trading of virtual assets and tokens, organizing and authorizing virtual asset service providers, ensuring the highest standards of protection for beneficiaries’ personal data, organizing the operation of virtual asset platforms and portfolios, and monitoring transactions and prevent virtual assets price manipulation are the main responsibilities of VARA.