Dubai is a popular tourist destination in the United Arab Emirates (UAE) because of its cutting-edge buildings, upscale stores, and exciting nightlife. Dubai has also been establishing itself as a center for blockchain and virtual currency in recent years.
The Dubai administration declared its intention to become the “first blockchain-powered government” by 2020 in 2019. The government has been establishing rules and infrastructure for the use of digital assets and blockchain technology in a number of industries, including finance, real estate, and logistics, as part of this project.
The Dubai Virtual Assets Hub was launched in 2019 to support this initiative. The hub is a platform that connects virtual asset companies, investors, and regulators in order to foster innovation and promote the development of a sustainable virtual assets ecosystem in Dubai. It aims to provide a platform for virtual asset companies to establish themselves in Dubai and to help them navigate the regulatory landscape.
About Dubai Virtual Assets Regulatory Authority – VARA
The Dubai government formed the Virtual Assets Regulatory Authority (VARA) as a regulatory organization to monitor and control the virtual assets market there. In addition to establishing and implementing virtual asset legislation, VARA is in charge of advising and supervising virtual asset businesses doing business in Dubai.
Issuing licenses to virtual asset businesses, overseeing their operations, and guaranteeing compliance with laws and international standards are among VARA’s primary duties. Additionally, the Authority will endeavor to stop money laundering and terrorist financing as well as to safeguard investors and consumers.
The Dubai Financial Services Authority (DFSA), a free zone in Dubai that regulates the financial services offered in the Dubai International Financial Centre, is in charge of VARA (DIFC).
The provisions of the VARA are designed to provide virtual asset enterprises operating in Dubai with a unified and clear legal framework that is in line with international standards and best practices. The regulations address matters such as the establishment and exchange of virtual assets, know-your-customer (KYC) and anti-money laundering (AML) standards, and cybersecurity precautions.
By creating VARA, Dubai is moving closer to its 2020 goal of having the first blockchain-powered government in the world. It also fits with the strategy to establish Dubai as a leading hub for virtual currency and blockchain technology.
Visit our extended research about Crypto regulation and laws around the world
What type of company in Dubai can fit a Virtual Assets Company?
The definition of a virtual assets company in Dubai may apply to a variety of business models:
Cryptocurrency exchanges: These are businesses that let clients buy, sell, and trade digital currencies like Bitcoin and Ethereum.
Companies that provide investment management services for digital assets, such as cryptocurrencies and tokens based on blockchains, include digital asset management firms.
Virtual asset service providers: These businesses are experts at creating and implementing blockchain-based solutions for a range of sectors, including finance, supply chain management, and real estate.
Service providers for virtual assets: These businesses offer services like custody options, trading platforms, and payment processors for virtual assets.
Security token issuance platform: These businesses offer a marketplace for the issuance and trade of security tokens, which are digital assets that signify ownership.