The signing of a strategic collaboration agreement by the Securities and Commodities Authority (SCA) and the Virtual Assets Regulatory Authority (VARA), two of the UAE’s main regulatory agencies, further solidifies the country’s position as a major hub for virtual assets. Through this partnership, the UAE’s virtual assets industry will be better regulated and more stable, guaranteeing its status as a leading hub for investment and innovation in digital assets.
Collaboration in the Management of Virtual Asset Service Providers (VASPs)
For Virtual Asset Service Providers (VASPs) doing business in the United Arab Emirates, a simplified licensing procedure is required by the cooperation agreement between the SCA and VARA. VASPs must first obtain a license from VARA in order to operate in or target the Dubai market. Following issuance of a license by VARA, these VASPs are inherently permitted to conduct business under SCA supervision in other regions of the United Arab Emirates. In order to conduct business from other emirates, one must obtain a license directly from the SCA. Ensuring complete oversight and regulatory consistency throughout the UAE is ensured by this dual-regulatory strategy.
Procedures for Comparative Monitoring and Adherence
The agreement includes a large section on establishing procedures for the mutual supervision of VASPs. This entails concerted efforts to enforce sanctions and fines, exchange pertinent data and statistics, and work together on staff certification and training initiatives for the virtual assets industry. These cooperative efforts aim to build a strong and legal ecosystem that complies with global anti-money laundering (AML) and market integrity regulations.
Executive Perspectives on Developing the Digital Assets Ecosystem
The Chairman of the SCA, Mohamed Ali Al Shorafa, stressed during the signing ceremony the significance of creating a stable and regulated environment for the development of virtual assets in the United Arab Emirates. He emphasized that the accord upholds the UAE’s dedication to upholding anti-money laundering laws and preserving trust in its investment environment. His remarks are in line with the UAE’s strategic goal of leading the world in the digital economy by emphasizing investor protection and regulatory clarity.
Making Sure Risk Management and Market Operations Run Smoothly
Similar views were expressed by VARA Chairman Helal Al Marri, who described the accord as a historic step toward creating regulatory coherence throughout the United Arab Emirates. He emphasized that effective portability of regulated services is made possible without sacrificing market risk assurance because of the close cooperation amongst federal partners, such as the SCA. It is anticipated that the collaboration will streamline regulatory procedures, facilitating the operations of VASPs while upholding strict criteria for market stability and safety.
Regulations and Compliance Structure for Activities Using Virtual Assets
Under the terms of the agreement, the SCA and VARA will work together to create thorough policies and guidelines for granting licenses to VASPs and overseeing associated operations. The Cabinet Decisions Nos. 111 and 112 of 2022, which establish a legislative framework for governing virtual assets and their service providers, will be in line with these laws. The UAE hopes to reduce risks related to financial crime and market volatility while promoting more investment and innovation in the virtual assets sector by guaranteeing clear and uniform norms.
