Saturday, 2 December 2023

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VARA demonstrates how regulators can work in tandem with the market: VARA Vice Chair

VARA demonstrates how regulators can work in tandem with the market: VARA Vice Chair

The Virtual Assets Regulatory Authority [VARA] is one of the earliest world regulatory bodies to release comprehensive crypto assets regulations to promote crypto-related activities in Dubai. Established in March 2022, VARA was created to promote the Emirate as a regional and international hub for virtual assets and related services.

VARA released a comprehensive regulatory framework for virtual asset service providers (VASP) in February this year. The regulatory framework includes four compulsory rulebooks and activity-specific rulebooks for VASPs. These rules will govern VASPs operating within the Dubai region only. The VARA framework also includes a rulebook for marketing, advertising and promotions by VASPs.

Cointelegraph spoke to Deepa Raja Carbon, Managing Director and Vice Chair at VARA, to gain insight into regulatory bodies’ views on the nascent technology and critical challenges they faced while establishing the framework for the crypto assets. When enquired about VARA’s approach toward virtual assets and what made them successful compared to other global regulators, Raja said that VARA’s unique proposition lies in its agility and collaborative ethos and its ability to respond swiftly to market needs.

Raja explained that VARA follows the ethos underpinning a philosophy that seeks to “find the highest point of convergence as a universal threshold rather than a minimum standard baseline is what will ultimately elevate and scale the entire ecosystem.”

“VARA is setting a precedent for how regulators can work in cohort with the market, dynamically adjusting to its pulse to sculpt a regulatory environment that is robust, resilient, and responsive: the 3R-Pyramid. It is this combination of speed, collaboration, and unwavering dedication to quality that defines our progress and, we believe, will help usher in a new era of borderless economic opportunity with traceable, hence minimized, cross-border risks,” Raja added.

When asked about the key challenges faced by VARA while establishing these virtual asset frameworks, the vice chair noted that crafting guidelines for a nascent industry like virtual assets is undeniably challenging. She added that the regulatory body rigorously analyzed existing frameworks and keenly observed the learning curves experienced by other regulatory bodies.

Related: Crypto City: Guide to Dubai

Raja told Cointelegraph that the regulatory body followed an inherently consultative and collaborative approach by engaging…

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