VARA Turns Dubai Into Premier Hub for Safe Virtual Transactions
VARA has issued 19 regulated VASP licenses, with 11 operational and 72 Initial Approvals for new entrants
In 2023, the virtual assets landscape faced considerable volatility, yet it proved to be a testament to the significance of a secure, traceable, and trustless Virtual Assets (VA) network, shaping the foundation for a resilient Future Economy.
Dubai’s Virtual Assets Regulatory Authority (VARA) actively responded to the dynamic shifts in blockchain and hybrid finance, dedicating major efforts to position Dubai as the responsible hub for regulated VAs.
As the inaugural regulator exclusively established for formalizing the sector, VARA achieved a record number of regulatory licenses within its first year of full operations, fostering a secure and inclusive ecosystem blending Traditional Finance (TradFi) with Decentralized Finance (DeFi).
VARA consistently aligns with international regulatory standards, particularly those outlined by the Financial Action Task Force (FATF). The regulatory framework reflects a balanced approach, harmonizing innovation with stringent regulatory practices.
Notably, 2024 witnessed VARA’s launch of pioneering regulations, responding to sector maturity demands and ensuring continued relevance to market operations. Collaborative efforts with traditional finance regulators, such as the Central Bank (CBUAE) and the Emirates Securities and Commodities Authority (SCA), played a pivotal role, particularly in establishing FATF-compliant security in cross-border asset flows.
Moreover, VARA’s cutting-edge on-chain cross-border transaction monitoring, showcased at Dubai’s annual Future Blockchain Summit, underscored its commitment to public-private partnership (PPP).
Engaging with industry participants, VARA continues to drive progressive innovation for environmental and socio-economic promise, fostering conversations and collaborations with peers globally, including recent discussions with the Hong Kong Monetary Authority (HKMA).
In addition to that, in 2023, VARA emerged as the world’s leading regulatory body for Virtual Assets, issuing 19 regulated Virtual Asset Service Provider (VASP) licenses, with 11 operational and 72 Initial Approvals for new entrants. The phased-out Minimum Viable Product (MVP) Licensing program demonstrated VARA’s proactive regulatory approach, allowing observation and learning without endangering the retail market.
The regulator issued 133 Application Acknowledgment Notices, 116 Proprietary Trading NOCs, and 94 non-VA activity confirmation notices, reflecting a responsive regulatory strategy.
Matthew White, VARA’s CEO, anticipates an accelerated focus in 2024 on enhancing infrastructure, expanding the VA ecosystem, and ensuring a secure and innovative environment.
He commented, “As we open 2024, VARA is poised to accelerate its comprehensive focus on bolstering the infrastructure, broadening the spread and deepening the resilience of our VA ecosystem. Our commitment remains ensuring a secure and innovative environment for service providers and consumers alike.”
He continued, “To this end, the industry can expect to see enhancements to the regulatory infrastructure for trading, devising innovative market structures for seamless transactions, and activating real-world use cases for secure, tokenised and fractionalised market participation using trustless blockchain networks. This endeavour involves close collaboration with market participants, particularly the mix of TradFi and native crypto with regulatory peers, underpinned by best practice protocols including those prescribed by FATF. Our goalpost remains unchanged – we started this journey 22 months ago and in this short space of time have built a strong foundation that we are in a position to accelerate from. 2024 will be the year to further Dubai’s position as the global leader in the new economy underpinned by a regulated VA ecosystem, contributing substantially to the GDP.”
It is worth noting that collaborative efforts with market participants, including TradFi and native crypto, underscore VARA’s commitment to best practice protocols and further solidify Dubai’s position as a global leader in the new economy.
It is also great to witness VARA stepping into the social media realm with its first post on LinkedIn and the activation of its X feed. These communication channels are not only timely but crucial for disseminating trusted sources of information and fostering a transparent dialogue on innovation and regulation in the virtual assets landscape.
Connecting with VARA on these platforms promises regular updates on Dubai’s journey towards becoming a secure and innovative hub for virtual assets. It’s a commendable move towards building an engaged community and staying informed about Dubai’s evolving role in the virtual assets space.
VARA remains dedicated to enhancing Dubai’s global leadership in the virtual assets industry, emphasizing a balance between innovation and robust regulatory practices. The commitment to aligning with international standards, particularly FATF recommendations, continues to drive collaborative efforts with global partners and stakeholders.
Recognizing the evolving landscape, VARA prioritizes progressive technology, investor protection, and managing cross-border risks while fostering awareness through education and strategic marketing.
The milestones achieved in 2023 set the stage for a promising future, and the regulator eagerly anticipates another groundbreaking year in regulating and nurturing the virtual assets ecosystem.
