Dubai, that has emerged as a hotspot for crypto activities, is taking a new approach to inject power and support into smaller Web3 players. VARA, the Web3 regulatory body of Dubai wishes to make the operational and compliance process for small players more cost effective. Figuring out a way to manage and reduce compliance costs for bootstrapped and emerging entities working around crypto, metaverse, blockchain, or NFTs, at this point, is among the top priorities for VARA in Dubai.
Matthew White, the CEO of Dubai’s Virtual Asset Regulatory Authority (VARA), was recently speaking at the Paris Blockchain Week. During his speech White said that there is still scope for improvement in Dubai’s crypto laws.
As per White, several methods are being considered in Dubai to take some burden off smaller Web3 businesses. Giving an example of a potential solution, White said, bigger and more established Web3 players could perhaps ‘host’ the smaller entities. Through this, the larger party could bear some expenses of the smaller party, while utilising to their advantage, the resources or initiatives that these dependent firms are working on.
“(In this system), the cost of compliance is borne by the larger systemic players, and this allows the smaller players to come into the ecosystem, be regulated, but also not have to suffer the same sort of level of costs of compliance that we’ve got,” the CEO of VARA said.
In March 2022, UAE Prime Minister Sheikh Mohammed bin Rashid Al Maktoum officially brought VARA into existence to oversee the growth, development, and safety of the Web3 sector. All Web3 players looking to set up shops in Dubai are mandated to identify themselves with VARA. Since its inception two years ago, VARA claims to have maintained constant discussions with Web3 players — trying to understand which form of industry structure would make business operations most fruitful.
In order to make it accessible for industry players around the world, VARA also established a digital headquarter in The Sandbox metaverse.
In November last year, the UAE also rolled-out a guidance manual for virtual assets services providers (VASPs) to outline information about compliance requirements for Web3 firms as well as potential punishments for disobedience. According to the Crypto Oasis Ecosystem report, there are already more than 1,800 organizations employing 8,650 people across the digital asset industry in the Middle East and North Africa.
