Dubai has taken a significant step forward in its bid to be the de facto centre for digital assets investment in the region with the establishment of a new crypto watchdog.
The Dubai Virtual Asset Regulatory Authority will be responsible for regulating and supervising the sector while the Dubai Virtual Asset Regulation law will serve as the legal framework to provide investor protection in line with international standards, according to a statement from Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum.
The virtual assets activities covered under the law include management, clearing and settlement services as well as the classification of certain virtual assets.
“We established an independent authority to oversee the development of the best business environment in the world for the virtual assets in terms of regulation, licensing, governance and in line with local and global financial systems,” he said on Twitter.
“The future belongs to whoever designs it,” said Sheikh Mohammed on Twitter. “Today, through the virtual assets law, we seek to participate in the design of this new and rapidly growing global sector.”
One of the first people to respond to the statement was Changpeng Zhao, CEO of crypto exchange Binance, who wrote: “Regulatory clarity is so important. This new virtual asset law in Dubai is a great step forward.”
Binance, the world’s largest crypto exchange by volume, signed an agreement with the Dubai World Trade Centre Authority back in December to help establish the free zone as a centre for digital assets.
Meanwhile the UAE’s Securities and Commodities Authority (SCA) has announced that it is close to issuing its own virtual asset investment regulation. The SCA is the sole securities regulator in the UAE except for the various financial freezones in Dubai and Abu Dhabi that are able to issue their own regulations.
The SCA’s announcement comes in the wake of the UAE being placed on a watch list by the Financial Action Task Force (FATF) over money laundering concerns.
The SCA stated that it had “completed its consultation with the concerned authorities in the country in developing the necessary regulatory framework to address the risks of money laundering and terrorist financing related to virtual assets and virtual asset service providers in the UAE, in order to ensure that the virtual assets sector adheres to the recommendations and requirements of the FATF”.
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