At the Paris Blockchain Week, which started on April 9, 2024, Matthew White, the head of Dubai’s new Virtual Asset Regulatory Authority (VARA), shared intentions to ease regulatory hurdles for smaller crypto businesses operating in the area.
During a conversation at a regulatory panel event, White admitted that existing laws for digital assets require modifications to alleviate the challenges faced by fledgling start-ups in this budding economy. To address this issue, White shared his intention to ease the regulations and make them more accommodating for these businesses.
Cost of Crypto Regulation in Dubai
One approach he suggested to alleviate stress on smaller cryptocurrency businesses is lowering the financial strain on them. As per the head of VARA, this cost reduction would foster a more favorable climate for their business activities.
White acknowledged that the current regime isn’t ideal. He’s currently exploring solutions to make it more inclusive for all, including finding ways to ease the financial burden of compliance for smaller entities.
In Dubai, crypto businesses aiming to secure a regulatory license via VARA are required to make an initial approval payment of around AED 1,035, or approximately $282, and a registration fee of approximately AED 9,020, equivalent to $2,456.
Furthermore, these companies are required to pay an MOA fee of AED 2,020, which is roughly equal to $550. In summary, the expenses for crypto businesses aiming to join the Dubai market amount to approximately $6,420 to obtain the license and commence operations.
A Potential Solution to High Regulatory Costs
White referred to getting the license as a “pricey process,” pointing out that numerous people don’t have the required means to secure it. He also suggested an alternative for reducing regulatory pressure, proposing a market framework where larger entities could “sponsor” smaller ones. In this setup, organizations with more substantial resources would bear the financial obligation of adherence.
“Smaller entities can join the system without shouldering heavy compliance costs because the bigger players in the market cover these expenses for them,” he explained to the group.
The VARA authority representative explained that considering expensive regulation options is an essential aspect of the regulator’s mission to encourage innovation and pass required laws. White took over as VARA’s head in November previous year, replacing Henson Orser. Upon his appointment, the Dubai regulatory body shared that this transition signified the Emirates moving closer to operating a mature market.
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2024-04-11 14:35