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Sheikh Mohammed bin Rashid Al Maktoum, the Vice President and Prime Minister of the UAE, the country's Minister of Defense, and also Dubai's Ruler, announced the approval of the Dubai Virtual Asset Regulation Law. The new law was created to ensure investor protection and establish "much-warranted international standards for virtual asset (VA) industry governance."
Also, the Dubai ruler announced the creation of the Dubai Virtual Asset Regulatory Authority (VARA) a licensing and compliance agency that will oversee the operations of virtual asset businesses across the Dubai Mainland and Free Zone territories.
Commenting on this latest development, the Sheikh said:
The Director General of the Dubai World Trade Center (DWTC) Helal Saeed Al Marri, also said that the establishment of a virtual assets law and regulatory body will boost "the UAE and Dubai’s position in the VA sector and attract VA leaders from all over the world."
In addition, the DWTC chief said that VARA will work with the UAE central bank and the Securities and Commodities Authority to deliver a full range of virtual asset services.
Meanwhile, under the provisions of the new law, no individual or entity can operate a crypto-related business in Dubai without authorization. Persons looking to deal in virtual assets activities need to establish a presence in the Emirate. Anyone who violates the provisions of the law would be fined, in addition to having their permits either suspended or canceled.
Dubai has been working towards positioning itself as a vital cryptocurrency hub. Back in December 2021, the DWTC announced that the center will become a comprehensive zone and regulator for cryptocurrencies, exchanges, operators, and crypto-related products.
The announcement added that the DWTC "will deliver and oversee a new world-class regulatory framework of Virtual Asset legislative and enforcement policies. This will be critical to facilitating and broadening cross-border operations and ecosystem innovation to enable safe market adoption and growth for this sector in Dubai."
Binance CEO Changpeng "CZ" Zhao was quick to applaud the development. Also in December, Binance signed an agreement with the DWTC to create an industry hub for the virtual assets industry. The Memorandum of Understanding (MoU) between both parties will help Dubai to move forward in developing a virtual assets ecosystem.