Dubai mandates licensing for crypto services providers with new regulatory requirements by the VARA.
Dubai has been a destination for crypto businesses and users for a while now, as the UAE seeks to become a hub for cryptocurrency and blockchain technology.
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The Virtual Assets Regulatory Authority (VARA), an independent crypto regulatory body in Dubai, has released rulebooks outlining the regulatory framework virtual assets services providers must adhere to. The penalty for non-compliance could be as hefty as 500,000 AED ($136,000).
Dubai has been a leader in the adoption of blockchain technology and cryptocurrency. The government of Dubai created a strategy to become the world’s first blockchain-powered government, and has launched several initiatives to promote the use of digital assets. An increasing number of companies in Dubai, form food delivery to services like Emiratescort, consider accepting cryptocurrencies as payment, making the need for comprehensive blockchain regulations paramount.
The Virtual Assets Regulatory Authority (VARA) is a regulatory framework for digital assets in Dubai. It is being developed by the Dubai International Financial Centre (DIFC) with the aim of attracting more investment and innovation in the crypto industry while ensuring that the financial market remains stable and secure. The framework includes guidelines for businesses operating in the digital asset space and aims to protect investors and consumers while encouraging the growth of the industry.
VARA’s guidelines are not yet in action, and currently await approval from the Board of Directors.
Numerous governments have been rolling out regulations and licensing for cryptocurrency users and services providers. Notably, the United Kingdom has entered the second phase of cementing its crypto regulation, meanwhile the Bank of England focuses on developing a ‘digital pound’ CBDC. Italy permitted registration of several leading exchanges, including Binance, as well as imposed a 26% capital gains tax on crypto profits exceeding €2,000.
Overall, authorities are beginning to see that digital assets are a permanent and developing feature of the current and future economy. Hence, they seek to control and benefit from them.
