Sheikh Mohammed bin Rashid Al Maktoum is in charge of Dubai. On March 9, he posted on Twitter that the UAE had passed its first law to regulate crypto assets. Sheikh Mohammed is also the leader of the United Arab Emirates (UAE).
The law would help UAE and Dubai grow and solidify their roles as key players in planning the future of virtual assets around the world. To do this, work would be done to make UAE and Dubai big players. This means that the authority will be in charge of making rules, giving out licenses, and running the whole industry.
The law about virtual assets has been written, and now the Dubai Virtual Asset Regulatory Authority will make sure it is followed (VARA). By keeping an eye on things, VARA would make sure that the following steps are taken to regulate virtual assets in Dubai:
- As a government agency, VARA would be in charge of keeping an eye on crypto activities and businesses that provide services related to them.
- VARA would be in charge of trading virtual assets and giving out virtual tokens. The other thing it would do is watch how things were going.
- It will also be in charge of approving and regulating virtual asset service providers (VASPs).
- The job of the regulator is to make sure that the personal information of the beneficiaries is as safe as possible.
- Its other job is to keep track of transactions involving virtual assets so that prices don't change.
VARA would also have to approve and control platforms for trading cryptocurrencies. If these platforms let people trade between cryptocurrencies and fiat currencies or between two or more cryptocurrencies, they would have to follow VARA.
Companies that do things like move, store, or manage cryptocurrency will also have to follow the new law. The DIFC is run by the Dubai Financial Services Authority (DFSA), which makes its own rules for cryptocurrencies (like Bitcode Prime).
Not included are digital assets that have been given out so they can be used as money.
Dubai has just decided to start licensing virtual assets. Because of this, a lot of cryptocurrency businesses are rushing to set up shop in the city. This makes Dubai the most recent Gulf country to take steps toward becoming a safe place for cryptocurrency businesses.
Exchange Bybit is the latest leader in its field to set up shop in Dubai. The company said last week that its world headquarters will be moving from Singapore to Dubai. Big names in the business like Crypto.com, FTX, and Binance have already done this.
Cryptocurrency businesses are excited about Dubai, but they are not as interested in Singapore as a center for digital assets. Only a few crypto companies that asked for licenses got them from Singapore. Since it started giving licenses, Dubai has been able to get a lot of big companies to move there.
Changpeng Zhao, the CEO of Binance, just moved from Singapore to Dubai. He said that the Gulf state's government is good for business and has been able to attract cryptocurrency startups because it has a "open mind."
Under the proposed rule, Dubai residents wouldn't be able to do anything with cryptocurrencies until they joined VARA. Businesses that deal with virtual assets would also need to join.
Bybit, an exchange for digital currencies, said on Monday that it would be moving its headquarters from Singapore to Dubai. On the same day that this news came out, Crypto.com said that it will open a regional hub office in Dubai. At the same time that the announcements were made, new laws were passed in Dubai with the goal of making the emirate a centre for crypto assets and related businesses like the metaverse.