VARA Leads in Crypto Regulation with Comprehensive Rules for Virtual Assets in Dubai
Summary:
The Virtual Assets Regulatory Authority (VARA) in Dubai has introduced a detailed set of regulations for providers of virtual asset services. The regulations consist of several rulebooks, which include marketing, advertising, and promotions, and are applicable only within Dubai. Deepa Raja Carbon, the organization's Managing Director and Vice Chair, shared insights into the development process and challenges of creating these regulations. The creation of the regulations involved extensive consultations with stakeholders and the examination of existing frameworks. The new regulations underline Dubai's intention to become a leading hub for virtual asset businesses.
The Dubai-based Virtual Assets Regulatory Authority (VARA) is a pioneer in setting clear regulations for the use of digital assets. Founded in March 2022, VARA's mission is to establish Dubai as a leading location for businesses working with virtual assets and related services. In February, VARA announced a set of detailed regulations for providers of virtual asset services (VASPs). These regulations, applicable exclusively to VASPs operating within Dubai, comprise four mandatory rulebooks and additional rulebooks specified to each activity. Included in the VARA prudential regime is a rulebook dedicated to marketing, advertising and promotion carried out by VASPs.
Deepa Raja Carbon, VARA's Managing Director and Vice Chair, shared her insights with Cointelegraph on regulatory perspectives surrounding this emerging technology, as well as the significant challenges faced when creating the crypto asset framework. Raja attributed VARA's success over other global regulators to its agility, cooperative spirit, and rapid responsiveness to market demands. She underlined VARA's philosophy of striving to set a universal standard rather than merely meeting a minimum requirement, stating this approach would ultimately elevate and scale the entire ecosystem.
Raja emphasized that VARA aims to foster an environment where regulators proactively adjust to market fluctuations. This approach, labeled the 3R-Pyramid, should ensure robust, resilient, and responsive regulations and promises enhanced, risk-minimized economic opportunities on a global scale.
Raja confided that developing regulations for a fledgling industry such as virtual assets faced inevitable challenges. She revealed VARA's process involved a thorough examination of existing frameworks and careful study of lessons learned by other regulatory bodies.
In communicating with Cointelegraph, Raja explained that VARA's methodology emphasized a consultative, cooperative strategy, engaging a wide spectrum of stakeholders. The feedback gathered from industry leaders, innovators, peer regulators, legislators, and the general public was then sculpted into guidelines in line with market requirements and realities.
In collaboration with Dubai's regulatory bodies like the Dubai Electronic Security Centre (DESC) and the Dubai Free Zone Council (DFZC), VARA crafted a framework that offers a uniform and adaptable approach across Dubai's mainland and free zones.
Through VARA's pro-crypto regulations, Dubai aims to become a magnet for virtual asset businesses, especially as eastern countries increasingly lure such enterprises. In a related development, Hong Kong released a raft of crypto regulations in 2023 for retail and institutional crypto platforms.
Published At
11/7/2023 11:04:59 AM
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