All About Dubai Virtual Assets Regulatory Authority (VARA)
Home to tech start-ups and world-class universities, Dubai is an economic powerhouse that is leading the UAE towards a brighter future! As virtual assets, such as NFTs and cryptocurrencies, are growing in popularity, the Dubai Virtual Assets Regulatory Authority (VARA) has been established to facilitate the virtual assets community. So, if you’re excited about what the future holds, our guide will acquaint you with the regulatory framework.
VIRTUAL ASSETS IN DUBAI
A virtual asset is a digital representation of value that can be transferred online for the purpose of payments and investment. There are different types of virtual assets, such as cryptocurrencies, NFTs (Non-Fungible Tokens) and security tokens.
According to the statistics issued by the Government of Dubai, the UAE’s digital economy generates around AED 100 billion ($27.2 billion), equal to 4.3% of the country’s GDP.
The huge popularity of the industry leads to the need for an advanced legal framework to safeguard investors and establish guidelines for the governance of the virtual asset sector.
ABOUT DUBAI VIRTUAL ASSET LAW
On 28th February 2022, His Highness Sheikh Mohammed bin Rashid Al Maktoum, the Vice President and Prime Minister of the UAE and Ruler of the Emirate of Dubai, issued Law No. 4 of 2022 regarding the regulation of virtual assets in the city. The law came into effect on 11th March 2022 and launched the Dubai Virtual Assets Regulatory Authority, or VARA.
The authority oversees the virtual asset sector across the emirate, including special development zones and free zones, with the exception of the Dubai International Financial Centre. The establishment of VARA comes as a part of the strategy of the Dubai Securities and Exchange Higher Committee to establish the UAE as a global player in the virtual asset industry.
Affiliated with Dubai World Trade Centre Authority (DWTCA), VARA will also be responsible for licensing approvals for digital assets, operators, products and exchanges. DWTC’s free zone will serve as VARA’s operating headquarters, providing the Virtual Assets community with the support needed to flourish in the region.
OBJECTIVES OF VARA DUBAI
With plans to create a strong digital economy, the Dubai Virtual Asset Regulation Law provides the legal framework for protecting the rights of investors and ensuring industry governance. VARA has to meet the following objectives:
- Promote Dubai as an international hub and boost its competitive edge for the development of a digital economy.
- Raise awareness about virtual asset services and encourage investment in the sector.
- Attract virtual asset companies to set up a base in the emirate.
- Develop regulations for those dealing in virtual assets and prevent illegal practices.
- Regulate and supervise all matters relating to virtual assets.
ACTIVITES OF VARA DUBAI
According to the Dubai Virtual Asset Regulation Law, the Dubai Virtual Assets Authority has the following duties and powers:
- Propose legislation for the regulation of virtual asset services.
- Develop strategic plans and a general policy for regulating virtual asset services.
- Regulate, oversee and supervise the processes of virtual tokens and virtual assets.
- Regulate and issue permits to virtual asset companies and oversee compliance.
- Establish rules to govern the activities relating to virtual assets.
- Classify the different types of virtual tokens and virtual assets, and prescribe rules and standards for their trading.
- Protect the personal data of beneficiaries in coordination with the Dubai Digital Authority.
- Monitor virtual asset platforms, virtual asset wallets and distributed. ledger technology and prevent the manipulation of the price of virtual assets.
- Raise awareness and educate beneficiaries on virtual assets and their risks.
FAQS
WHAT IS DUBAI’S VARA SANDBOX?
Sandbox is an Ethereum blockchain-based application through which users can create, sell and buy digital assets. VARA has opened its metaverse-based headquarters on this virtual platform, called the Meta HQ and become the first asset regulator to establish an official presence in the metaverse. The aim of this initiative is to ensure that the UAE maintains a leading position in the field of technology.
CAN YOU USE CRYPTOCURRENCY TO MAKE PAYMENTS IN DUBAI?
Yes, a number of businesses in Dubai accept cryptocurrency as a form of payment including hotels and even restaurants.
That’s all for our guide to the Dubai Virtual Assets Regulatory Authority (VARA). The new law is a testament to the growth of the virtual assets sector in the region. The industry is likely to grow in size significantly in the next few years.
Maybe in the future we might be able to invest in digital currencies and attain investment visas. But even if that became the case, there’s no doubt that the business gold visa would remain highly sought-after.
Want to know about the most valuable companies in the country? The top public limited companies in the UAE include First Abu Dhabi Bank, Etisalat Group and Emirates NBD. You can also read about oil and gas companies in Dubai and other emirates.
