Dubai’s regulator VARA has been commended for its collaborative and agile approach in developing comprehensive regulations for virtual assets in the region. In an interview, Deepa Raja Carbon, the managing director and vice chair of VARA, highlighted the regulator’s commitment to consulting with stakeholders, legislators, and the general public in order to create a regulatory framework that is responsive to market needs. Carbon emphasized that VARA’s unique proposition lies in its ability to find the highest point of convergence as a universal threshold, rather than a minimum standard, elevating and scaling the entire ecosystem. By working in tandem with the market, VARA aims to create a robust and resilient regulatory environment that will shape Dubai as a prominent hub for virtual assets and related services.
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Virtual Assets Regulatory Authority (VARA)
The Virtual Assets Regulatory Authority (VARA) is taking the lead in promoting crypto-related activities in Dubai. As one of the earliest regulatory bodies to release comprehensive crypto assets regulations, VARA aims to position Dubai as a regional and international hub for virtual assets and related services. Established in March 2022, VARA has been actively working towards creating a regulatory environment that fosters responsible and compliant virtual asset services.
Release of comprehensive regulatory framework
In February, VARA released a comprehensive regulatory framework for virtual asset service providers (VASPs) operating within the Dubai region. This framework includes four compulsory rulebooks that encompass various aspects of virtual asset services, as well as activity-specific rulebooks for different types of VASPs. Additionally, VARA has introduced a rulebook that governs the marketing, advertising, and promotions conducted by VASPs.
Interview with Deepa Raja Carbon
To gain further insight into VARA’s approach to digital assets and its success compared to other global regulators, Cointelegraph spoke with Deepa Raja Carbon, the managing director and vice chair at VARA. Carbon highlighted that VARA’s unique proposition lies in its agility, collaborative ethos, and ability to respond swiftly to market needs. She emphasized the importance of finding a universal threshold that elevates and scales the entire ecosystem, rather than settling for a minimum standard baseline.
Carbon also discussed the challenges faced by VARA in establishing the virtual asset frameworks. She acknowledged that crafting guidelines for a nascent industry like virtual assets is undeniably challenging. To overcome this, VARA adopted a consultative and collaborative approach by engaging with various stakeholders, including industry leaders, innovators, peer regulators, legislators, and the general public. This extensive engagement ensured that the guidelines developed were comprehensive and resonated with the needs and realities of the market.
VARA’s role in promoting crypto-related activities in Dubai
VARA’s primary goal is to position Dubai as a regional and international hub for virtual assets and related services. The regulatory framework established by VARA creates an environment that encourages the growth of digital asset businesses in the Middle East and Asia. With the increasing interest in cryptocurrencies and blockchain technology in these regions, Dubai aims to capitalize on the opportunities presented by the digital asset industry.
Establishment of VARA in March 2022
VARA was established in March 2022 with the mandate to promote virtual asset activities in Dubai. The creation of VARA was driven by the need to regulate the fast-growing crypto industry and ensure the protection of investors and consumers. By setting clear objectives and implementing a comprehensive regulatory framework, VARA aims to provide a stable and secure environment for virtual asset service providers and users operating within Dubai.
VARA’s regulatory framework for virtual asset service providers (VASPs)
VARA’s regulatory framework is designed to promote responsible and compliant virtual asset services. The framework includes guidelines and requirements that VASPs must adhere to in order to operate within the Dubai region. By establishing these regulations, VARA aims to protect consumers, prevent financial crimes, and maintain the integrity of the virtual asset market.
Compulsory and activity-specific rulebooks
VARA’s regulatory framework includes four compulsory rulebooks that cover various aspects of virtual asset services. These rulebooks outline the requirements and obligations that VASPs must meet in order to obtain and maintain their licenses. Additionally, VARA has developed activity-specific rulebooks that cater to specific types of virtual asset services, ensuring that regulations are tailored to the unique characteristics of each service.
Rules governing VASPs operating within Dubai region
VARA has jurisdiction and authority over VASPs operating within the Dubai region. VASPs are required to comply with the regulations set forth by VARA and must meet specific requirements and obligations to ensure the safety and security of their operations. By establishing clear rules and guidelines, VARA aims to foster a thriving virtual asset ecosystem that is transparent, accountable, and compliant with international standards.
Opportunities for digital asset businesses in the Middle East and Asia
Dubai’s goal of becoming a hot spot for the digital asset industry presents numerous opportunities for businesses in the Middle East and Asia. With its strategic location, advanced infrastructure, and supportive regulatory environment, Dubai provides an ideal platform for digital asset businesses to grow and thrive. As more countries in the region look to attract digital asset businesses, Dubai’s comprehensive regulatory framework and commitment to fostering innovation position it at the forefront of the industry.
In comparison to other regions, such as Hong Kong, Dubai’s progress in crypto regulation highlights its dedication to creating a conducive environment for the digital asset industry. While Hong Kong has also made significant strides in implementing regulatory guidelines, Dubai’s comprehensive approach and emphasis on collaboration and responsiveness have set it apart.
In conclusion, VARA’s release of a comprehensive regulatory framework and its efforts to promote crypto-related activities in Dubai demonstrate the regulatory body’s commitment to fostering a responsible and compliant virtual asset ecosystem. By taking a collaborative approach and actively engaging with stakeholders, VARA has established itself as a leader in the global regulatory landscape. As Dubai continues to position itself as a regional and international hub for virtual assets, digital asset businesses in the Middle East and Asia can seize the opportunities presented by this dynamic and rapidly evolving industry.