The Virtual Assets Regulatory Authority (VARA), established in March 2022, has emerged as a pioneering force in the world of cryptocurrency regulation, bolstering Dubai’s position as a global hub for virtual assets and related services.
VARA’s commitment to fostering the crypto sector is underscored by its recent release of comprehensive regulations tailored for virtual asset service providers (VASPs).
In February, VARA unveiled a meticulous regulatory framework comprising four obligatory rulebooks and activity-specific guidelines for VASPs, exclusive to operations within the Dubai region.
Additionally, VARA introduced a rulebook addressing the marketing, advertising, and promotional practices employed by VASPs.
Deepa Raja Carbon, Managing Director and Vice Chair at VARA, shed light on the regulatory body’s approach to digital assets and its distinctive success compared to global counterparts.
Carbon emphasized VARA’s agility, collaborative spirit, and ability to swiftly adapt to market dynamics as key strengths.
She articulated VARA’s philosophy, which seeks to establish a universal threshold of excellence rather than a minimal standard baseline, thereby elevating and scaling the entire crypto ecosystem.
Carbon elaborated on VARA’s unique approach to regulation, stating, “VARA is setting a precedent for how regulators can work in cohort with the market, dynamically adjusting to its pulse to sculpt a regulatory environment that is robust, resilient, and responsive: the 3R-Pyramid.”
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This synergy of speed, collaboration, and unwavering commitment to quality, according to Carbon, defines VARA’s progress and promises to usher in a new era of borderless economic opportunity with minimized cross-border risks.
VARA’s journey in crafting guidelines for the nascent virtual asset industry was not without its challenges. Carbon acknowledged the inherent complexity of the task and highlighted VARA’s rigorous analysis of existing frameworks and lessons learned from other regulators.
To address these challenges, VARA adopted an inherently consultative and collaborative approach, engaging with a diverse range of stakeholders, including industry leaders, innovators, peer regulators, legislators, and the general public.
Carbon emphasized the importance of guidelines that are both comprehensive and aligned with market realities.
Collaborating closely with established entities like DET and the DFZC for Mainland, as well as various free zones in Dubai, VARA has meticulously crafted a unified and adaptable framework.
VARA’s crypto regulations aspire to position Dubai as a prominent destination for digital asset businesses, echoing the broader trend of Middle Eastern and Asian countries vying to attract cryptocurrency enterprises.
In this evolving landscape, Hong Kong has also made significant strides in 2023 by introducing regulatory guidelines aimed at crypto platforms serving both retail and institutional clients.
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