Dubai’s Virtual Asset Regulatory Authority (VARA) has issued its Virtual Assets and Related Activities Regulations 2023. The Regulations set out a comprehensive Virtual Asset (VA) Framework built on principles of economic sustainability and cross-border financial security.
The UAE has remained committed to enabling these drivers safely, updating its oversight and regulatory approach, addressing global risks of money laundering (ML) and terrorist financing (TF), arising from the potential misuse of new technologies. The VA Framework is structurally designed to offer regulatory certainty – allowing the market to have greater clarity on the expected level of operator responsibility. It also mandates gold-standard risk assurance and Anti-Money Laundering (AML) standards to be applied by licensed entities within the Emirates.
As the Authority mandated to provide VA oversight across the Emirate of Dubai [except DIFC], VARA will facilitate VA-associated economic stability, investor protection, and jurisdictional resilience. The new regulations span a comprehensive breadth of seven licensed VA activities – Advisory services, Broker-Dealer services, Custodial services, Exchange services, Lending-Borrowing services, Payments and Remittances services, and VA Management and Investment services. Additionally, issuance is a regulated activity under the VARA regime, to allow consumers to make a more informed decision on new tokens being launched in Dubai, and the associated obligations of the issuer.
Existing MVP Operational licence applicants [and holders of either the Provisional or Preparatory MVP licenses], legacy UAE-based Virtual Asset Service-Providers (VASPs), and new market entrants will be provided with a route towards full FMP licensing. All VASPs offering VA services to the Dubai market prior to the publication of the FMP Regulations will be required to register with VARA and become fully compliant with the final rules. Any breach of this condition will be subject to regulatory action.
Dubai Virtual Assets Regulatory Authority [VARA] is the world’s first specialised regulator for the Virtual Assets sector. Established in March 2022, following the effect of Law No.4 of 2022, VARA is responsible by decree for licensing and regulating the Virtual Asset sector in the Emirate of Dubai and its free zone territories [excluding DIFC], and oversees all licensing requirements and applications for authorisation of Virtual Asset activities under UAE law. VARA plays a central role in creating Dubai’s advanced legal framework to protect investors and establish international standards for Virtual Asset industry governance, while supporting the vision for a borderless economy.
Read other stories: LCX Gains Regulatory Approval For First 10 Million Euro Tokenized Bond
Archax partners with ScribeStar to digitalise issuance and admission processes