Despite the city’s position as a popular destination for trading virtual assets, it was reported that the UAE government wants to transform the city into a global hub for this type of asset.
Prior to this decision, the Dubai Multi Commodities Center, the biggest deregulation zone in the UAE, had set up an administrative system for crypto firms in March 2021, and has previously authorized 22 organizations, according to Bloomberg.
Abu Dhabi’s International Financial Center, a money center and deregulation zone, had given its first crypto trade permit, to Matrix, in May 2020.
Last December, the Dubai Media Office said that the Dubai World Trade Centre(DWTC) would officially become a crypto zone where all cryptocurrencies and virtual assets companies can operate. The city’s media office said it would establish security for investors and prevent money laundering.
Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, issued Dubai, the first law of its kind to regulate virtual assets aimed at raising the position of Dubai and the UAE as a regional and global destination in virtual assets, providing the necessary systems to protect investors and dealers in this sector, and contributing to attracting investments and companies working in this field to make the emirate a center for their business.
On March 9, the city adopted this law meant to regulate the operations of cryptocurrencies and digital assets, like non-fungible tokens (NFTs). This was also confirmed via a tweet from Al Maktoum
“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,” Al Maktoum said in his tweet.
This law is the recent step taken by Dubai over the past few years, all of which aim to make Dubai a real global center for the “Web 3.0” community.
What is Web 3.0?
Web 3.0 is an idea for a new iteration of the internet that is based on public blockchains. The term was introduced in 2014 by Gavin Wood and the idea gained popularity in 2020 and 2021 from larger cryptocurrency enthusiasts, large technology companies, and others.
What to Expect From the New Law?
The UAE government wants to lay out a Dubai Virtual Assets Regulatory Authority (VARA), which would be entrusted with managing these resources.
The VARA is additionally expected to be an autonomous authority under the Dubai World Trade Center Authority, which will supervise the guideline, administration, and authorizing of digital currencies, NFTs, and other virtual resources.
The VARA’s fundamental obligations incorporate directing the issuance of new crypto tokens, managing and controlling the exchanging of virtual resources, guaranteeing that elevated expectations of insurance are set up, checking exchanges, and more.
The transfer of virtual assets, management services, exchange services, operating virtual assets platforms, and virtual asset custody is also under the VARA’s domain.
