Dubai has promulgated a new law in order to regulate virtual assets that are becoming popular with many investors in the UAE and across the world.
“We established an independent authority to oversee the development of the best business environment in the world for virtual assets in terms of regulation, licensing, governance, and in line with local and global financial systems,” Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Ruler of Dubai, tweeted on Wednesday.
“Our step is a leap towards the future aimed at developing this sector and protecting all investors in it,” Sheikh Mohammed said.
Virtual assets exist digitally and can include cryptocurrencies like Bitcoin and Ethereum. Non-fungible tokens, which represent real-world items like properties and paintings, are also considered virtual assets.
The Dubai Virtual Asset Regulatory Authority will be responsible for licensing and regulating the sector across Dubai Mainland and Free Zone territories (exclusive of DIFC).
The establishment of the Dubai Virtual Asset Regulatory Authority comes as a part of the strategy of the Dubai Securities and Exchange Higher Committee.
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.
He added that Dubai Virtual Asset Regulatory Authority will provide a full range of VA services in coordination with the Central Bank of the UAE and the Securities and Commodities Authority.
Envisioned to anchor the world’s VA market leaders, credible institutional enablers, and innovation facilitators, the Dubai Virtual Asset Regulatory Authority will serve as the central custodial authority for this specialized industry.
The law, which comes into force from the date of its publication in the Official Gazette, defines the tasks and competencies of the Authority, which is considered the competent body in the Emirate to regulate, supervise and control virtual asset services.
The law also stipulates that the authority is mandated with organizing and setting the rules and controls that govern the conduct of VA activities, including management services, clearing and settlement services, in addition to classifying and specifying types of virtual assets.
According to the law, it is prohibited for any person in the Emirate to engage in activities without VARA authorization. The person wishing to practice any of the VA activities must establish a presence in Dubai to conduct business.