Dubai’s VARA Aims to Facilitate Smaller Crypto Entities, Acknowledges Imperfections in Regulations
Matthew White, CEO of Dubai’s Virtual Asset Regulatory Authority (VARA), expressed the watchdog’s commitment to easing the regulation burden for smaller crypto entities.
Speaking at a regulatory panel discussion during the Paris Blockchain Week, White acknowledged the imperfections in crypto regulations and emphasized the need for improvement.
VARA CEO Advocates for Innovative Solutions to Regulatory Compliance Challenges
White acknowledged the high costs associated with regulatory compliance, particularly for smaller crypto entities with limited resources. He emphasized the importance of finding solutions to address this issue.
To address these concerns, he stated VARA’s extensive engagement with industry stakeholders, including global players and government officials, to develop regulations that accommodate the diverse needs of the crypto community.
White proposed potential solutions, such as larger market participants hosting smaller ones to share compliance burdens. He stressed the importance of fostering innovation while ensuring regulatory compliance.
“We’re looking at structures whereby larger market participants host smaller ones, so the cost of compliance is borne by these larger players,” he explained.
This arrangement would allow smaller players to enter the regulated ecosystem without shouldering the same level of compliance costs as larger players.
The VARA CEO highlighted VARA’s primary objective, stating,
“What VAR aims to do is to… balance innovation with regulation; that is the end goal.”
He stated that the crypto ecosystem in Dubai boasts nearly 2,000 web3 or crypto companies and the importance of not disrupting it with regulatory measures. White outlined VARA’s inclusive approach to regulation, stating, “It’s not an exclusive [regulation]… anybody can be part of it.”
White also emphasized the role of regulatory certainty in attracting investment and enabling organizations to grow and scale. He noted that while regulatory frameworks can be challenging to navigate, they ultimately contribute to the industry’s maturity and facilitate long-term planning for businesses.
VARA CEO Matthew White Discusses Future of Crypto Regulation in Dubai
The Virtual Asset Regulatory Authority (VARA) was established in March 2022 with the mandate to oversee and cultivate the Web3 ecosystem in Dubai. Less than a year later, in February 2023, VARA unveiled comprehensive regulatory guidelines tailored for virtual asset service providers (VASPs).
These guidelines encompass four mandatory rulebooks, along with seven activity-specific rulebooks delineating operational protocols for VASPs, as well as a rulebook for virtual asset issuance.
In November of the same year, Matthew White assumed the role of CEO at VARA, succeeding former CEO Henson Orser. VARA announced White’s appointment on November 16 as part of its preparations to transition to full-scale market operations.
White’s appointment came amidst a backdrop of tightened regulations in the United Arab Emirates, including penalties for unlicensed virtual asset service providers.
During the panel discussion, White discussed the future of regulation in the crypto industry, acknowledging the inevitability of significant regulations in the short to medium term and citing recent high-profile events as driving forces behind major countries’ efforts to intensify regulatory agendas.
Despite the imminent regulatory landscape, he expressed optimism about leveraging technology to achieve policy objectives in the long term. White hinted at the possibility of exploring technological solutions through pilot programs at VARA, aligning with the authority’s philosophy.
“I do think we can look to technology to achieve the policy objectives that we set out to achieve… maybe we’ll have a little pilot… in VARA… that’s what we set out to do.”
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