The UAE has collaborated to build a unified legal framework for cryptocurrency to improve the licensing process and enhance global competitiveness.
The coordination between the UAE securities regulator and the Dubai digital asset regulator focuses on mutual recognition of digital asset service licenses while ensuring a strict compliance process in anti-money laundering and counter-terrorism financing.
MAIN CONTENT
Cooperation between SCA and VARA establishes a synchronized legal framework for cryptocurrency in the UAE.
Digital Asset Service (VASP) licenses are mutually recognized, but detailed compliance checks are still required.
The new mechanism improves the registration process, real-time data sharing, and joint oversight.
How does the UAE cooperate to build a unified legal framework for cryptocurrency?
The strategic collaboration between the UAE Securities and Commodities Authority (SCA) and the Dubai Virtual Asset Regulatory Authority (VARA) has been announced with the aim of establishing a consistent legal framework for cryptocurrency nationwide. This is an important step towards standardizing and coordinating the management of digital asset services.
By establishing partnerships, the two agencies can mutually recognize VASP licenses, contributing to simplifying procedures for cryptocurrency service providers operating across regions in the UAE. This reflects UAE's experience and professionalism in cryptocurrency management and facilitates market development.
How are VASP licenses issued and recognized in the new model?
Digital Asset Service (VASP) licenses issued by the SCA and VARA will be mutually recognized but do not imply automatic approval for use. Each license still must undergo rigorous compliance reviews, especially concerning anti-money laundering and counter-terrorism financing (AML/CFT).
Thorough compliance checks ensure that service providers operate transparently, contributing to enhanced security and reliability in the cryptocurrency ecosystem in the UAE. This highlights the understanding and commitment to risk governance of both agencies.
What highlights does the new management and oversight mechanism have?
The new mechanism includes a unified registration system, real-time data sharing, and a coordinated oversight committee for both management and legislative aspects. This is a breakthrough that helps accelerate the processing of applications and timely responses in the fast-paced cryptocurrency market.
The close linkage in oversight and information sharing helps create transparency and effective control while enhancing the competitiveness of the UAE on the international cryptocurrency map. This mechanism is proof of professionalism and strategic vision in the development and management of cryptocurrency.
The UAE Securities and Commodities Authority and the Dubai Virtual Asset Regulatory Authority are jointly building a cooperation mechanism to 'enhance efficiency and professionalism in managing digital asset services,' demonstrated through the synchronized application of registration and compliance control processes.
(Source: joint press release, August 2023)
Frequently Asked Questions
What agencies are included in the legal framework for cryptocurrency in the UAE?
The UAE Securities Authority (SCA) and the Dubai Virtual Asset Regulatory Authority (VARA) are the two leading entities coordinating the establishment of the legal framework.
Is the VASP license automatically issued after mutual recognition?
No, licenses still need to go through compliance assessment steps including AML/CFT checks even if they are mutually recognized.
How does the unified registration mechanism benefit cryptocurrency service providers?
Helps minimize procedures, speed up application processing, and improve coordination in oversight, enhancing operational efficiency.
Why is real-time data sharing important in cryptocurrency oversight?
It helps detect and respond promptly to potential risks, enhancing market transparency and security.
What impact does this collaboration have on the UAE's position in the global cryptocurrency market?
Enhances competition, clarifies regulations, and attracts high-quality cryptocurrency service investors worldwide.
Source: https://tintucbitcoin.com/uae-sca-va-dubai-vara-hop-tac-tien-dien-tu/
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