The United Arab Emirates (UAE) has implemented a new law on virtual assets and established a virtual asset regulation agency, prime minister Sheikh Mohammed bin Rashid Al Maktoum tweeted on 9 March.
According to the announcement, the new legal framework for crypto is aimed at protecting investors and establishing the UAE and Dubai’s positions as a “key player in designing the future of virtual assets globally”. The new regulatory agency, named Dubai Virtual Asset Regulatory Authority (VARA), will focus on compliance and disclosures of virtual asset service providers in the UAE.
The new digital asset law will require all Dubai residents to register with the Dubai Virtual Asset Regulatory Authority prior to engaging in crypto-related activities. VARA will also handle the UAE’s crypto licenses, which will be given only to companies that have an established business presence in the Emirates. The agency will not only be in charge of regulating crypto exchanges, but also custodians, asset managers, and any other service related to offering and trading tokens.
Rumors of the UAE’s new crypto licensing framework appeared back in February, when an anonymous government official told Bloomberg the law would be implemented in the first quarter of 2022. Shortly after today’s announcement, Binance CEO Changpeng “CZ” Zhao took to Twitter to applaud the creation of VARA, and noting that the new law was a “great step forward” for Dubai.