Small crypto players in Dubai to benefit from VARA regulator

Dubai, which has become a hotspot for cryptocurrency activity, is taking a new approach to injecting power and support into smaller Web3 players. Dubai’s Web3 regulator VARA wants to make operations and compliance processes more cost-effective for small businesses. Currently, one of Dubai VARA’s top priorities is to find a way to manage and reduce compliance costs for bootstrapped and emerging entities working around cryptocurrencies, the Metaverse, blockchain or NFTs.

Matthew White, CEO of the Dubai Virtual Asset Regulatory Authority (VARA), recently spoke at Paris Blockchain Week. In his speech, White said there is still room for improvement in Dubai’s cryptocurrency laws.

According to White, Dubai is considering a variety of ways to ease the burden on small Web3 businesses. White gave an example of a potential solution, saying that larger, more established Web3 players might be able to “host” smaller entities. In this way, the larger party can absorb some of the costs of the smaller party while using the resources or initiatives those dependent companies are undertaking to its advantage.

“[In this system]compliance costs are borne by the larger system players, which allows smaller players to enter the ecosystem and be regulated but also not have to bear the same level of compliance costs as traditional players. We’ve done that,” said the VARA CEO.

In March 2022, UAE Prime Minister Sheikh Mohammed bin Rashid Al Maktoum officially established VARA to oversee the growth, development and security of the Web3 industry. All Web3 participants wishing to open a store in Dubai must identify themselves through 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 productive.

To make it accessible to industry players around the world, VARA has also established a digital headquarters in The Sandbox virtual universe.

In November last year, the UAE also launched a Virtual Asset Service Provider (VASP) guidance manual outlining information on compliance requirements for Web3 companies and potential penalties for non-compliance.according to Crypto Oasis Ecosystem ReportThe digital asset industry in the Middle East and North Africa already has more than 1,800 organizations employing 8,650 people.