Dubai virtual asset regulator awards 19 regulated VASP licenses with 72 more to come

VARA, Dubai’s virtual asset regulatory authority has announced that in 2023 it awarded 19 regulated VASP licenses, of which 11 are already operational. In addition 72 initial approvals have been issued to new entrants and have commenced licensing process.

The regulatory also stated that it had issued 133 application acknowledgement notices which is a reflection of its proactive and responsive approach.

A total of 116 Proprietary Trading NOCs have been issued, with an additional 37 assessed and ready to be issued while 94 non-VA activity confirmation notices were also issued.

Matthew White, CEO of VARA, 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. 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, tokenized and fractionalized market participation using trustless blockchain networks. This endeavor 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.”

VARA in its release mentions the importance of decentralized finance. It states, “VARA recognizes the importance of progressive technology and the need to fast-track maturity in investor and consumer protection, along with managing cross-border risks. We continue to foster awareness, education, and a collective recognition of our evolving digital landscape, leveraging marketing as a vehicle to enhance the impact of our policy-making and regulatory efforts.”

In addition VARA also notes that its Minimum Viable Product [MVP] Licensing program is being phased out as it has served the purpose for which it was initiated in a period where the full market regulations had not been formally launched. In that period, it allowed VARA to observe, engage with, and custom-design rules based on leanings from global sector participant behaviors, without endangering the retail market.

Finally VARA reaffirmed that it upholds its alignment with international regulatory standards, especially those outlined by the Financial Action Task Force (FATF). Collaboration with traditional finance regulators, including but not limited to the Central Bank (CBUAE) and the Emirates Securities and Commodities Authority (SCA), has been pivotal, particularly in syncing efforts for FATF-compliant security in cross-border asset flows.

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