Dubai’s regulatory body, the Virtual Assets Regulatory Authority (VARA), has pursued an inclusive approach by engaging with various stakeholders to establish guidelines for handling digital assets. The authority’s primary objective is to position Dubai as a significant hub for virtual asset-related activities. VARA commenced its regulatory initiatives in early 2022, marking its proactive involvement in fostering the digital assets ecosystem.
In February of the same year, VARA introduced a comprehensive set of regulations tailored for entities involved in managing digital assets within the Dubai region. These regulations, encompassed in multiple rulebooks, are designed to supervise and standardize the operations of Virtual Asset Service Providers (VASPs). Moreover, the guidelines include specific rules for VASPs’ marketing, advertising, and promotional activities, all aimed at ensuring compliance and transparency in the rapidly evolving digital assets landscape.
Deepa Raja Carbon, the Managing Director and Vice Chair at VARA, shed light on the authority’s distinctive strategy. Emphasizing VARA’s agility and cooperative approach, Carbon highlighted the organization’s prompt response to market demands, considering it a pivotal factor in VARA’s success. She underlined the importance of establishing a flexible regulatory environment that transcends minimum standards and instead strives for universal excellence to enhance the overall digital assets ecosystem.
Discussing the challenges faced during the formulation of guidelines for the burgeoning digital assets industry, Carbon acknowledged the inherent difficulties. VARA meticulously studied existing regulatory frameworks and drew insights from the experiences of other regulatory bodies.
Carbon highlighted VARA’s approach, characterized by an inclusive and consultative process, wherein they collaborated extensively with diverse stakeholders, including industry leaders, innovators, legislative bodies, and the general public. By fostering collaboration with entities like the Dubai Electronic Transactions (DET) and the Dubai Free Zone Council (DFZC), VARA aimed to develop a unified and adaptable framework that resonates with the market’s needs and realities.
The comprehensive regulatory framework established by VARA aims to position Dubai as a favorable destination for digital asset businesses. This move echoes trends observed in other global financial centers like Hong Kong, which in 2023 made substantial progress in setting guidelines for digital asset platforms catering to both retail and institutional clientele.
VARA’s commitment to cultivating an ecosystem that is not only robust but also responsive and aligned with the market’s pulse represents a pioneering effort in establishing a conducive environment for the growing digital assets sector.