For the last few years, Dubai has maintained its status as one of the top ten most important cities in the world. 85% of the population is made up of people from over 200 different countries, bringing together people from diverse sets of cultural backgrounds and walks of life, and opening up a world of possibilities.
Dubai’s rapid growth is reflected in the city’s projected smart cities, which would use blockchain technology to improve infrastructure, administration, and public services, paving the way for future expansions of the virtual world and the realisation of ambitious goals such as those of Metaverse.
Several companies and organisations in the United Arab Emirates aim to bring the Metaverse concept to life by creating a virtual reality setting that combines social networking, investment, business, NFT creation and exchange, virtual real estate, gaming, entertainment, and shopping.
Because of its new Law that seeks to offer a regulatory framework for organisations dealing with Virtual Assets, Dubai is ideally positioned to attract new investments and launches in the expanding Cryptocurrency and Blockchain sector.
The Virtual Assets Law
The “New Law,” Dubai Law No. 4 of 2022, is announced at the start of this year. The aim of this newly passed Law is to regulate virtual assets in the Emirate. According to the VARA experts, this Law is a forward-thinking measure to meet the growing demands of Dubai’s cryptocurrency industry.
It has far-reaching effects on any individual or company planning to engage in Virtual Asset-related operations within the Dubai Emirate. The New Law not only lays forth guidelines for establishing and managing any company or operation involving Virtual Assets, but it also defines the category of Virtual Assets.
Dubai’s new virtual assets law provides guidelines for companies that deal with virtual assets, including security tokens, DeFi projects, and NFTs.
Institutional investors in the cryptocurrency market are likely to expand their spending in light of Dubai’s new virtual assets regulatory law and the accompanying new virtual assets regulatory authority (VARA) that has been launched to regulate, monitor, and control virtual asset services.
Sheikh Mohammed bin Rashid Al Maktoum inaugurated the Dubai Virtual Asset Regulatory Authority (VARA), which will establish the rules and controls for the management, clearing, and settlement of all virtual assets, as well as the classification of certain types of virtual assets.
According to the experts, the Emirate is expected to see a rise in investment locally by companies already in the cryptocurrency market, such as service providers, intermediates, and issuers of cryptocurrency-related financial instruments.”
Security tokens, DeFi projects, and NFTs are all included in the legislation intended to establish a regulatory framework for organisations dealing with cryptocurrencies.
Highlights encompassing the law
Some of the most important and highlighting features of the law include:
- This Law has been promulgated, but it will not take effect until it is published in the Official Gazette.
- Unlike federal regulations, this Law exclusively applies to virtual assets within the Emirate of Dubai (thus, excludes the DIFC).
- A new organisation, the Dubai Virtual Assets Regulatory Authority (“VARA”), will be in charge of regulating cryptocurrencies and other digital assets.
- The virtual assets are digital representations of value that can be digitally traded or transferred or utilised as an exchange or payment instrument or for investment reasons,” as defined by the Law, are “virtual assets.”
- In order to legally provide virtual asset services in the Emirate of Dubai, businesses must first obtain a licence from VARA.
- Virtual Assets Regulation Authority (VARA) has been tasked with working with the UAE Central Bank and spreading education about the risks and benefits of trading in virtual assets.
- The Law specifies the sorts of conduct that require VARA licences and oversight.
- The VARA is expected to make separate implementing decisions about the DVAL’s implementation, which would include a description of the activities, processes for licencing, exempted virtual assets and associated fees and charges.
The ripple effect on properties for sale in Dubai
Having the Law governing virtual assets passed and the Dubai Virtual Assets Regulatory Authority set up is a positive development for the city. The city is still ahead of the curve in cutting-edge technologies and is in step with global trends.
Once again, this demonstrates that Dubai is committed to progress for the future since it will affect new enterprises, existing businesses opening offices in Dubai, innovation, creation, and much more.
The UAE citizens, investors, and the Dubai real estate market benefit greatly from the new virtual assets law and the accompanying regulatory authorities. Benefits will be felt strongly by the properties for sale in Dubai. This opens the door for cryptocurrency holders to invest in real estate.
Some specialists in the Dubai real estate market have predicted that the industry will be the first to embrace non-fungible tokens (NFTs) for practical use. These tokens could be used in tandem with title deeds issued by the Real Estate Regulatory Authority (RERA) or for the automated collection of levies like the 4% Dubai Land Department (DLD) fee. This would be an advantage for the real estate market.
Many in the Dubai real estate market believe that blockchain-enabled technology, such as NFTs, is the future of the properties industry, even though traditional property titles and processes will continue to be utilised for many years.
Residents and investors in the United Arab Emirates (UAE) are likely to welcome the virtual assets law and the new regulatory authority, which will, in turn, have a positive effect on the properties for sale in Dubai and have repercussions for new and existing businesses setting up shop in the city, as well as for innovation, creation, and other forward-looking endeavours.
Benefiting both the residential real estate and holiday rental markets opens the door for Bitcoin holders to enter both markets. In a nutshell, regarding regulatory activities in this industry, Dubai continues to be ahead of the curve compared to worldwide markets. Given the United States’ historical unwillingness to enact any precise regulation beyond a handful of state-issued laws, investors should see this as a positive sign and, of course, recognise Dubai’s ongoing efforts to be at the forefront of upcoming technologies.