Dubai’s Virtual Assets Regulatory Authority (VARA) believes it has managed to find the perfect balance when it comes to the time taken to award licenses to crypto-related applicants. According to a senior VARA official, Sean McHugh, in an interview with CoinDesk, the regulator has struck the right balance, not too slow and not too fast.
As the most populous of the seven emirates in the UAE, Dubai is vying for the title of the global crypto hub, competing with jurisdictions like Singapore and Hong Kong. VARA plays a crucial role in this branding effort, along with other regulators in the country such as the Abu Dhabi Global Market (ADGM).
McHugh, the Senior Director of Market Assurance at VARA, likened the licensing process to the story of Goldilocks and the Three Bears, emphasizing the importance of finding the right pace. While some applicants may feel the process is moving slowly, others may perceive it as moving too fast. However, McHugh believes that VARA has struck the right balance, just like the Goldilocks principle – not too hot, not too cold.
Over the past year, VARA has granted full regulatory approvals to major global crypto exchanges like OKX, Crypto.com, and Binance. While VARA does not specify an average timeframe for obtaining licenses, representatives from major exchanges have indicated that it involves several months of regulatory fine-tuning.
Recently, VARA updated the rules regarding the marketing of virtual assets and imposed fines on seven entities operating without the necessary licenses. The focus of VARA remains on responsible licensing, supervision, compliance with anti-money laundering and terrorism financing regulations, and customer protection.
McHugh also noted that there is growing interest in the crypto ecosystem from major traditional financial institutions. He anticipates that in the next two to three years, events like the Future Blockchain Summit in Dubai will see more executives from companies like BlackRock, Goldman Sachs, and JP Morgan, signaling the institutionalization of the space. With a background in leading financial institutions such as Goldman Sachs, Citibank, Fidelity Investments, and Citadel, McHugh brings a wealth of experience to VARA.
In conclusion, VARA’s approach to licensing in the crypto space reflects a careful balance between efficiency and thoroughness. As Dubai aims to establish itself as a global crypto hub, regulators like VARA play a crucial role in shaping the industry’s future. Through responsible licensing, supervision, and compliance efforts, VARA is paving the way for the growth and institutionalization of the crypto sector in the UAE and beyond.