_A's New Leadership in Dubai Marks Next Phase of Crypto Regulation

Last updated: December 21, 2023 06:27 EST . 2 min read

Disclosure: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. By using this website, you agree to our terms and conditions. We may utilise affiliate links within our content, and receive commission.Source: AdobeStock / Grigory BruevThe hands-on approach by Dubai’s Virtual Asset Regulatory Authority (A) has enabled it to set a global precedent for regulator-industry cooperation, its utives said.

All virtual asset service providers (VASPs) must obtain a license from A before offering their services in the UAE emirate.

A’s managing director and vice chair Deepa Raja Carbon discussed what the regulator focuses on while crafting crypto-related regulation.

First, it never differentiates for the “sake of distinction but by a steadfast commitment to harmonization and interoperability within the international regulatory landscape,” Raja Carbon told Cointelegraph.

The vice chair argued that A has set a precedent, showing how the world’s regulators and stakeholders can cooperate. She said,

“Our approach has been inherently consultative and collaborative. We engaged with a diverse array of stakeholders — from industry leaders to innovators, peer regulators to legislators, investors to the public.”

Another major focus is on outlining a comprehensive regulatory framework and rulebook aligned with global practices.

Per Raja Carbon, creating guidelines for a novel industry like cryptocurrencies is challenging. That said, A has explored existing frameworks and incorporated global practices.

Furthermore, the regulator is actively working with other entities in Dubai. These include the Department of Economy and Tourism and the Dubai Free Zones Council. Thanks to this, A has “crafted a unified and fungible framework.”

Hands-on Approach

A is not an old regulator but is moving very fast. It was created in March 2022 to oversee crypto-related regulation and help develop Dubai’s Web3 eco.

Already in February 2023, it published regulatory guidelines for VASPs.

Vanessa Zuabi, associate director of eco development, commented on the above-mentioned collaboration with and between market players. She told Cointelegraph that A “regularly engages” with virtual asset companies. This includes roundtable discussions, feedback sessions, and collaborative workshops.

Per Raja Carbon,

“This hands-on approach ensures that we get first-hand insights into the decentralized eco’s intricacies, allowing us to craft regulations that are both robust and conducive to growth. It’s a symbiotic relationship where we learn from them, and they benefit from a supportive regulatory landscape.”

The regulator has established Special Development Zones (SDZs), and these, said the managing director, have served as innovation incubators. They also connected virtual assets and traditional financial s in one place.

Furthermore, SDZs act as microecos. They reflect the larger market and enable A to gather empirical data.

As such, they’ve been key in shaping regulations. They helped regulators understand the complexities of the crypto market and “influenced the pragmatic and inclusive approach to building a regulatory framework.”

And it goes beyond just crafting regulations. These zones enabled regulators to continue shaping rules and refining strategies.

This approach supports innovation while “maintaining robust oversight, ultimately fostering a regulatory environment where virtual assets can flourish responsibly and sustainably,” Raja Carbon said.

She added that the “camaraderie” within SDZs is vital. It enables newcomers to swiftly become part of the community, “which collectively elevates their potential.”

Lastly, Raja Carbon noted that A supports the developments of Web3 sectors like metaverse and decentralized finance (DeFi).