Dubai’s Virtual Assets Regulatory Authority (VARA) has solidified its position as a global leader in the virtual assets industry, according to its recently released annual report.

In 2023, VARA focused on establishing Dubai as a responsible hub for regulated virtual assets, issuing a record number of regulatory licenses and fostering a secure and inclusive ecosystem for traditional and decentralized finance operations.

One of VARA’s key priorities has been aligning its regulatory framework with international standards, particularly those outlined by the Financial Action Task Force (FATF).

The authority has pioneered a balanced approach that harmonizes innovation with stringent regulatory practices.

It has also collaborated closely with traditional finance regulators such as the Central Bank and the Emirates Securities and Commodities Authority to ensure FATF-compliant security in cross-border asset flows.

VARA’s efforts to promote the growth and development of the virtual assets industry were showcased at Dubai’s annual Future Blockchain Summit.

The authority unveiled cutting-edge on-chain cross-border transaction monitoring dashboards, which were well-received by industry participants.

VARA’s global leadership in virtual assets

VARA has actively engaged in public-private partnerships and bilateral discussions with global peers to drive interoperability and knowledge sharing, with a recent focus on collaboration with the Hong Kong Monetary Authority.

The figures from 2023 demonstrate VARA’s success as the world’s leading regulatory body in the field of virtual assets.

The authority has awarded 19 regulated Virtual Asset Service Provider (VASP) licenses, with 11 already operational.

An additional 72 Initial Approvals have been issued to new entrants in the Dubai market, reflecting the authority’s responsiveness to industry demands.

VARA has also phased out its Minimum Viable Product (MVP) Licensing programmed, which served as a learning phase to custom-design rules based on global sector participant behaviors.

“As we open 2024, VARA is poised to accelerate its comprehensive focus on bolstering the infrastructure, broadening the spread and deepening the resilience of our VA ecosystem. Our commitment remains ensuring a secure and innovative environment for service providers and consumers alike. To this end, the industry can expect to see enhancements to the regulatory infrastructure for trading, devising innovative market structures for seamless transactions, and activating real-world use cases for secure, tokenised and fractionalised market participation using trustless blockchain networks,” Matthew White, the recently appointed CEO of VARA, said.

“This endeavour involves close collaboration with market participants, particularly the mix of TradFi and native crypto with regulatory peers, underpinned by best practice protocols including those prescribed by FATF. Our goalpost remains unchanged – we started this journey 22 months ago and in this short space of time have built a strong foundation that we are in a position to accelerate from. 2024 will be the year to further Dubai’s position as the global leader in the new economy underpinned by a regulated VA ecosystem, contributing substantially to the GDP,” he added.

VARA’s dedication to FATF recommendations remains unwavering as the authority continues to work collaboratively with global partners and stakeholders.

The authority aims to balance innovation with robust regulatory practices and foster awareness and education to enhance the impact of its policy-making and regulatory efforts.

The achievements of VARA in 2023 lay the foundation for a promising future. The authority expressed gratitude to its stakeholders for their support and collaboration and looks forward to another groundbreaking year in regulating and nurturing the virtual assets ecosystem.