Is Crypto Trading Legal In Dubai? Technology Neutrality : Understanding Dubai’s New Crypto Regulation
Cryptocurrency & Blockchain
Dubai is fast becoming one of the world’s key crypto hubs and understanding this responsibility & privilege, Dubai’s Virtual Asset Regulatory Authority (VARA), has issued its Virtual Assets (VA) and Related Activities Regulations 2023 with the goal to promote Dubai as a key hub for VA and related services.
VARA aims to:
- Boost the competitive edge of Dubai at the local and international levels & develop the digital economy in Dubai;
- Increase awareness of investment in the VA services and products sector & encourage innovation;
- Contribute to attracting investments and encourage VA companies to set up business in Dubai;
- Develop the regulations required for the protection of investors and dealers in VA, and endeavor to curb illegal practices in coordination with the ecosystem;
- Develop the regulations, rules, and standards required for regulating, supervising, and overseeing VA players.
Regulators have two potential approaches to deal with innovative technologies.
They can embed new crypto technology within the existing regulatory framework, enabling crypto companies to position their products, activities, and regulatory responsibilities within an existing regulatory framework, hence jumpstarting the industry by providing clarity to new players on the rules of the game. It provides tools to incumbents & traditional players to engage with the crypto industry & create a flourishing environment for rapid growth.
Alternatively, regulators can create bespoke rules & guidelines designed to provide clarity, assure certainty, and mitigate market risks. Dubai, with its newly created crypto regulator VARA, decided on a bespoke regulation that is up-to-date with current challenges & opportunities in our industry. Dubai has put itself at the forefront of the world’s crypto regulatory framework, which is particularly important due to rapid growth & innovation and the challenges of the fast-evolving crypto industry, such as the crypto shadow banking ecosystem at the epicenter of the current contagion & collapse.
Perhaps the most important fundamental principle the Dubai regulator has chosen as its key guidance going forward, is TECHNOLOGY NEUTRALITY.
In a nutshell, it means that the regulator will not favor any particular technological approach or innovation. However, will let the market forces and consumer choice decide the most valuable products & innovations. VARA will “not regulate products or protocols as the starting point for achieving its policy goals (except in special cases)”. And the regulator will not “decide which innovations are subjectively valuable or not”.
Moreover, the Crypto industry is one of the biggest opportunities for Dubai & UAE to take the lead in nurturing and developing the infrastructure that will support the world’s growth in the coming decades. I’ll continue providing my input on VARA’s regulatory framework over the next days – stay tuned!
Anton is a Strategic Advisor of Pazar, a decentralized OTC marketplace. In addition, Anton founded & served as CEO of flovtec. A Swiss market-maker providing liquidity solutions to digital asset exchanges, token issuers & protocols. And offers investment products for professional & institutional investors. Furthermore, Anton is also a co-founder of Trust Square AG, a pre-eminent blockchain technology hub located in Zurich’s financial district. Lastly, Anton co-founded Lykke Corp, a
Is Crypto Trading Legal In Dubai? Technology Neutrality : Understanding Dubai’s New Crypto Regulation
