Dubai to Establish First Law Regulating Crypto & NFTs

Dubai is adopting a new law that would regulate virtual assets such as cryptocurrencies and non-fungible tokens (NFTs). The Dubai Virtual Asset Regulation Law is created to establish a legal framework that would help protect investors, and outline international standards that would allow for responsible growth between businesses that deal with virtual assets in the emirate and their interactions with the government.

Since the digital economy makes up 4.3% of the UAE's gross domestic product, the government is interested in establishing a strong digital economy, and hopes to take advantage of the opportunities that digital transformation could create. To this end, the law has also established the formation of the Dubai Virtual Asset Regulatory Authority (VARA), which will be responsible for regulation and licensing, and will oversee special development zones and free zones (with the exception of the Dubai International Financial Centre).

Every person within the UAE will be required to seek authorisation from VARA before they can practice virtual asset activities, including but not limited to operating and managing virtual assets platforms and services, virtual asset transfer services, exchange services between currencies and virtual assets, and services that involve a virtual asset portfolio. Those who violate the law will be fined, and may have their permits suspended for up to six months or cancelled altogether.