The crypto segment in Dubai will now come under a new regulatory framework. The Prime Minister of the United Arab Emirates (UAE) Sheikh Mohammed bin Rashid Al Maktoum has signed a new law for virtual assets.
Along with this, the Virtual Asset Regulatory Authority (VARA) has also been created to oversee the crypto segment. It will determine the types of virtual assets, categories and controls to monitor them. VARA has the power to impose fines and punishments on violators of the new law as well as ban business.
The new law requires citizens of Dubai to register with VARA before engaging in crypto-related activities. Businesses dealing with virtual assets, such as crypto exchanges, also need to provide information about themselves to VARA.
The purpose of passing legislation related to the crypto segment in Dubai is to enforce international standards and grow this industry. This will also ensure security and transparency for crypto investors.
Over the years, Abu Dhabi and Dubai in the UAE have emerged as fast-growing crypto hubs. With increasing competition in the region, a Specialized Zone for Virtual Assets was created at the Dubai World Trade Center (DWTC) in December last year to attract new business.
Authorities in the UAE have also announced severe punishment for those who cheat crypto investors. In this, apart from heavy fines for scammers, there is also a provision of a jail sentence.
US President Joe Biden has also signed an executive order to oversee the crypto industry. The executive order asked the Federal Reserve to consider whether it should issue its own digital currency. It also includes a study by the Treasury Department and other agencies on the impact of cryptocurrencies on the financial system and security.
In India too, the central government has made preparations to make laws for the crypto segment. However, some organizations like Swadeshi Jagran Manch have raised the demand for a complete ban on cryptocurrencies. They say that there is a possibility of increasing money laundering from cryptocurrencies. Cases of fraud related to this segment have also increased in the country.