Dubai's Virtual Assets Regulatory Authority (VARA): A regulatory leadership

The Virtual Assets Regulatory Authority (VARA) of Dubai, the world’s first regulator of its kind, serves as a transparent and trusted guiding Authority for the emerging world of Virtual Assets. VARA aims to take its mission global by creating an easy-to-replicate framework to regulate the Virtual Assets industry. 
Like on many fronts, Dubai is taking a leap in the virtual assets space by introducing an independent regulatory authority known as the Virtual Assets Regulatory Authority. It is the sole Authority regulating virtual assets across Dubai.   

But what is a Virtual Asset?
Dubai Virtual Asset Law defines a Virtual Asset as: “a digital representation of value that may be digitally traded, transferred, or used as an exchange or payment tool, or for investment purposes. This includes Virtual Tokens [a digital representation of a set of rights that can be digitally offered and traded through a Virtual Asset Platform], and any digital representation of any other value as determined by VARA.”
Dubai is the Virtual Asset hub and a regulatory leader for the world.
Embracing technology, Dubai released Dubai Blockchain Strategy in 2016. Further, in July 2022, Dubai released the Dubai Metaverse Strategy, aiming to become one of the top 10 metaverse economies in the world, attracting more than 1,000 companies and providing 40,000 jobs in the domain by the year 2030.
Dubai is pioneering the way with blockchain-enabled solutions like the Unified Busines Registry Platform, which facilitates KYC through a blockchain-enabled platform across regulators and banks in UAE. In addition, establishing the Centre for the Fourth Industrial Revolution UAE (C4IR UAE) contributes to the vision by enabling a multi-stakeholder dialogue.
Objectives of setting up VARA
Here are the regulatory objectives of the Authority as published on its website as on 28 August 2022.
  • To position Dubai as a regional and international hub for Virtual Assets and related services and to develop a digital economy in the city to boost its competitive edge locally and internationally.
  • To empower investors and increase awareness about Virtual Asset services and products and encourage innovation to promote real opportunity.
  • To promote the new world of Virtual Assets and attract investments and businesses to set up their base in the Emirate of Dubai.
  • To promote a shared responsibility in developing efficient and bespoke regulations for the protection of investors and to curb illegal practices in coordination with the concerned entities.
  • To develop the regulations, rules and standards required for regulating, supervising and overseeing Virtual Asset Platforms, Virtual Asset Service Providers and all other matters related to Virtual Assets.
Regulations issued by VARA
The VARA has published two administrative orders so far.
  1. Administrative order no. 01/2022: Relating to the regulation of marketing, advertising and promotions related to virtual assets
  2. Administrative order no. 02/2022: Pursuant to, and to be read in conjunction with issued administrative order no. 01/2022 relating to the regulation of marketing, advertising and promotions related to virtual assets (marketing regulation), the Dubai Virtual Assets Regulatory Authority (VARA) undertakes to impose the following fines and penalties in the event of violation or non-compliance
VARA aims for safe market adoption and growth using the technology by leveraging expertise from global experts and organisations and collaborating with relevant local financial regulatory authorities. The proactive approach by the leadership will certainly help investor confidence in the region, thereby accelerating the region’s growth on this front.