The crypto sector in Dubai will now fall under a set of new regulatory framework. UAE Prime Minister Sheikh Mohammed bin Rashid Al Maktoum has signed a new law for virtual assets while also establishing an independent body to oversee the governance of the crypto space. Called VARA, Dubai’s Virtual Asset Regulatory Authority will classify the types of virtual assets and set controls to monitor the digital assets sector. VARA will also play a role in punishing the violators of the new laws with its authority of imposing fines and suspending businesses.
The law now requires Dubai citizens to register with VARA first before engaging in crypto-related activities.
Businesses dealing with virtual assets like crypto exchanges and transfers will also have to identify themselves before VARA.
Approving laws around the crypto sector in Dubai is intended to create a “much-warranted international standards” to shape up the up-and-coming industry, an official statement said.
The rules will also ensure the safety and transparency of business for crypto investors.
Today, we approved the virtual assets law and established the Dubai Virtual Assets Regulatory Authority. A step that establishes the UAE’s position in this sector. The Authority will cooperate with all related entities to ensure maximum transparency and security for investors. pic.twitter.com/LuNtuIW8FM
— HH Sheikh Mohammed (@HHShkMohd) March 9, 2022
Regulatory clarity is so important. This new virtual asset law in Dubai is a great step forward. https://t.co/qIMFjMiSUv
— CZ :large_orange_diamond: Binance (@cz_binance) March 9, 2022
In recent times, UAE’S Abu Dhabi and Dubai have emerged as developing crypto hubs.
In December last year, a specialised zone for virtual assets was set-up in the Dubai World Trade Centre (DWTC) to attract new business as regional economic competition began to heat up.
Strict punishments for crypto scammers targeting investors in the country have also been announced by the authorities in the UAE.
Violators will be liable to pay a penalty of up to AED 1 million (roughly Rs. 2 crore) along with spending some jail time.
Meanwhile, Dubai’s crypto rules came into enforcement the same day US President Joe Biden signed executive orders on the government oversight of the cryptocurrency industry.
The order directs the US Federal Reserve to explore whether the central bank should jump in and create its own digital currency.
The US Treasury Department and other federal agencies have also been instructed to study the impact of cryptocurrency on financial stability and national security.
With regulatory laws around crypto cropping up in several parts of the world, the decentralised industry is roping in international validations.
Earlier this year, India also announced plans of bringing in an RBI-regulated ‘Digital Rupee’ while also levying a 30 percent tax on income generated from the transfer of virtual digital assets.
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