The United Arab Emirates (UAE) took a big step towards harmonizing its strategy to crypto regulation. The nation’s Securities and Commodities Authority (SCA) and the Dubai Digital Belongings Regulatory Authority (VARA) introduced a strategic partnership to unify the UAE’s strategy to crypto rules.
Final 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 your entire UAE, in keeping with a Wednesday announcement shared with Cointelegraph.
A VARA spokesperson informed Cointelegraph that the most recent 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 mentioned.
Licensing reciprocity, not automated passporting
Whereas the settlement establishes a mechanism for mutual recognition of licenses between SCA and VARA, it won’t provide automated “passporting” of licenses throughout jurisdictions.
“Licensing reciprocity is a key function of the partnership, however not automated passporting,” the spokesperson mentioned.
The spokesperson clarified that the settlement establishes a mutual recognition mechanism between the SCA and VARA.
Because of this a VASP licensed by one authority might be acknowledged by the opposite. Nevertheless, they are going to be topic to coordination protocols and relevant regulatory checks.
“This consists of 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, decreased duplication and a streamlined path to nationwide protection.
The VARA spokesperson mentioned this eliminates the necessity to navigate “separate, probably conflicting” approval processes, which “lowers operational danger and improves pace to market.”
“It additionally strengthens the UAE’s world enchantment as a reputable, innovation-first jurisdiction with a unified strategy to digital asset oversight,” the spokesperson added.
SCA types 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-Cash Laundering (AML) coordination and the formation of a Legislative Evaluation Committee.
The SCA accredited the formation of the committee, which is remitted to work with VARA to judge and refine crypto rules within the nation in step with worldwide greatest practices. This indicators dedication from each events to construct a globally aggressive regulatory atmosphere.
Officers from each regulators described the partnership as a serious step in positioning the UAE as a frontrunner in crypto governance.
VARA CEO Matthew White referred to as the partnership “a pivotal second” within the journey to future-proof the UAE’s digital financial system. On the identical time, SCA CEO Waleed Al Awadhi mentioned transparency and belief are central to attracting funding.
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A broader effort to reinforce regulatory coordination
Whereas 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 mentioned that there’s an ongoing dialogue between different regulators, together with the Abu Dhabi International 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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