Dubai is joining the push for clearer rules on crypto regulation with Sheikh Mohammed bin Rashid Al Maktoum hoping to introduce a rapid change in the way digital assets are regulated.
Based on a tweet dated March 9, the sheikh believes Dubai, and the United Arab Emirates (UAE) for that matter, have a pivotal role to play in the way the digital assets world evolves.
To help establish a new regulatory framework, the UAE and Dubai have created the Dubai Virtual Asset Regulatory Authority (VARA) which will supervise key aspects of the industry.
VARA’s remit will be quite diverse as the regulator oversees different crypto-related services and activities, along with the parties that run them.
An important milestone for the regulator will be its remit to monitor the issuance of virtual tokens and virtual assets, which has long been a contentious point in the west.
The US Securities and Exchange Commission still treats ICO’s as securities offerings and requires approval beforehand, something that is usually done to a vague set of criteria.
VARA is hoping to clear this up. The regulator will also seek to ensure what it argues is the highest standards for protecting consumer data. Any crypto trading platform would need to receive an approval from VARA in order to continue or even begin running business operations.
This oversight will expand to management services, custody, and crypto transfer companies. All of those will be within the purview of the newly-created regulator. VARA will have no legal remit in Dubai International Financial Center (DIFC), the financial free zone created by Dubai.
The regulator in DIFC, the Dubai Financial Services Authority, is working on its own regulatory framework for cryptocurrencies.