Legalized in Dubai: Bitcoin Transfer, NFT's, and More

Dubai has been nothing short of innovative and advanced in its capacity to wield a modern-day, adaptive society; with the revolutionary Expo 2020 coming to a close, and a whirlpool of pioneering projects underway, Dubai announces the legalization and regulation of virtual assets such as bitcoin and non-fungible tokens (NFT’s).

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai, issued the Dubai Virtual Asset Regulation Law aimed at creating an advanced legal framework to protect investors and designing much-warranted international standards for virtual asset (VA) industry governance that will promote responsible business growth, under prudential regulations.

A virtual asset may take the form of any digitized token of value that could be traded, stored, transferred, or used for payments, local agency Gulf News explained. “They could make payments easier, faster, and cheaper; and provide alternative methods for those without access to regular financial products”.

Safe and Controlled Regulation

Under the law, the provisions of which are applicable throughout the Emirate, including special development zones and free zones, except for the Dubai International Financial Centre, the Dubai Virtual Asset Regulatory Authority (VARA) shall be established. The authority has legal personality and financial autonomy and will be linked to the Dubai World Trade Centre Authority (DWTCA).

Sheikh Mohammed bin Rashid confirmed that Dubai will be a key player in designing the future of virtual assets in the world. Being a driving economic force in industries like real estate, healthcare, transport and logistics, Dubai is set to attract a vast number of investors and talented individuals to the city.

The safe and controlled regulation of virtual assets, as well as the 10-year golden residency visa for coders or computer programmers will create a hub of advanced tech-businesses surrounded the immense potential of Web 3.0.

 

 "Today, we are participating in designing the future of virtual assets globally," he said, noting that Dubai possesses all the capabilities that qualify it to be one of the most important global centres in the field of virtual assets, especially the advanced legislative environment. "Dubai will provide the most advanced virtual asset ecosystem in terms of organization, governance and security. Approving the virtual asset law and establishing the Dubai Virtual Asset Regulatory Authority is a vital step that establishes the UAE’s position in this sector a step that aims to help the sector to grow and protect investors," he added.

 

The Dubai Virtual Asset Regulatory Authority will be responsible for licensing and regulating the sector across Dubai Mainland and Free Zone territories (exclusive of DIFC).

According to the law, it is prohibited for any person in the Emirate to engage in activities without VARA authorization. The person wishing to practice any of the VA activities must establish a presence in Dubai to conduct business.

The law defines the activities subject to VARA authorization as follows:

1. Operating and managing virtual assets platforms services

2. Exchange services between virtual assets and currencies, whether national or foreign

3. Exchange services between one or more forms of virtual assets

4. Virtual asset transfer services

5. Virtual asset custody and management services

6. Services related to the virtual asset portfolio

7. Services related to the offering and trading of virtual tokens 

The acts that constitute a violation of the provisions of this law and its related decisions, and the fines imposed on a violator, shall be determined by a decision issued by the board of directors of the Dubai World Trade Centre. In addition to the penalty of a fine, the VARA may take any of the following measures against the violator: to suspend the permit for a period not exceeding six months, cancel the permit, and coordinate with the competent commercial licensing authority in the Emirate to cancel the commercial license.