The United Arab Emirates (UAE) took a major step towards harmonizing its method to crypto regulation. The nation’s Securities and Commodities Authority (SCA) and the Dubai Virtual Assets Regulatory Authority (VARA) introduced a strategic partnership to unify the UAE’s method to crypto rules.
Last September, the regulators expressed their intention to work collectively towards unifying crypto frameworks within the nation. One function of the partnership is that it’s going to permit Dubai-based licenses to service all the UAE, in keeping with a Wednesday announcement shared with Cointelegraph.
A VARA spokesperson informed Cointelegraph that the newest improvement formalizes the settlement between the 2 regulators and “operationalises that intent” with concrete mechanisms.
“In essence, the 2024 MOU was a place to begin. The present partnership is its formal and useful implementation,” VARA stated.
Licensing reciprocity, not automated passporting
While the settlement establishes a mechanism for mutual recognition of licenses between SCA and VARA, it won’t supply automated “passporting” of licenses throughout jurisdictions.
“Licensing reciprocity is a key function of the partnership, however not automated passporting,” the spokesperson stated.
The spokesperson clarified that the settlement establishes a mutual recognition mechanism between the SCA and VARA.
This signifies that a VASP licensed by one authority might be acknowledged by the opposite. However, they are going to be topic to coordination protocols and relevant regulatory checks.
“This contains AML/CFT assessments, operational readiness, and supervisory alignment, making certain that nationwide safety and compliance requirements stay sturdy,” the spokesperson informed Cointelegraph.
For VASPs working and desirous to function within the UAE, the partnership offers regulatory readability, diminished duplication and a streamlined path to nationwide protection.
The VARA spokesperson stated this eliminates the necessity to navigate “separate, doubtlessly conflicting” approval processes, which “lowers operational danger and improves pace to market.”
“It additionally strengthens the UAE’s world attraction as a reputable, innovation-first jurisdiction with a unified method to digital asset oversight,” the spokesperson added.
SCA kinds committee to refine rules
The mechanisms embrace a unified digital asset service supplier (VASP) registration framework, mutual license recognition, real-time information sharing and joint supervision protocols, cross-jurisdictional Anti-Money Laundering (AML) coordination and the formation of a Legislative Review Committee.
The SCA authorized the formation of the committee, which is remitted to work with VARA to guage and refine crypto rules within the nation in step with worldwide finest practices. This alerts dedication from each events to construct a globally aggressive regulatory surroundings.
Officials from each regulators described the partnership as a significant step in positioning the UAE as a frontrunner in crypto governance.
VARA CEO Matthew White known as the partnership “a pivotal second” within the journey to future-proof the UAE’s digital financial system. At the identical time, SCA CEO Waleed Al Awadhi stated transparency and belief are central to attracting funding.
A broader effort to reinforce regulatory coordination
While the current improvement is a bilateral settlement between the SCA and VARA, the spokesperson informed Cointelegraph that it’s a part of a broader UAE effort to reinforce national-level regulatory coordination.
VARA stated that there’s an ongoing dialogue between different regulators, together with the Abu Dhabi Global Markets (ADGM) and native and worldwide stakeholders to advertise interoperability, supervisory consistency and cross-border cooperation.
“Future collaborations stay a strategic precedence,” the spokesperson added.
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