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Dubai’s Virtual Assets Regulatory Authority - World’s First Regulatory Authority To Debut In Metaverse
06 May 2022

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Dubai’s Virtual Assets Regulatory Authority - World’s First Regulatory Authority To Debut In Metaverse

The Virtual Assets Regulatory Authority (VARA) of Dubai has announced its foray into the metaverse by establishing a metaverse headquarters in the interactive virtual world of 'The Sandbox.'

VARA aims to ensure that the regulator is accessible to its industry in their environment and to enable cooperative participation between global Virtual Asset Service Providers (VASPs), industry thought-leaders, and international regulatory authorities as the world's first Regulator to make its debut in the metaverse.

VARA expects to regulate the governing principles of the services and activities, rather than the constantly-evolving products and underlying technologies, as it was created to provide a secure and progressive operating framework for the virtual asset (VA) sector to scale while assuring market and investor protection.

This daring step underscores Dubai's government's belief that virtual assets will be critical to the future digital economy, and its willingness to develop Dubai as the virtual assets capital of the world.

Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council, spoke during the launch of the VARA MetaHQ on the Sandbox, saying:

“Dubai maintains a leading position at the forefront of technological transformation. We have exceeded the role of an early adopter to become an innovator and participant in shaping the future of this technology.

"Today, VARA joins the Metaverse to become Dubai’s - and the Metaverse’s - first government authority, ushering in a new era in which Dubai Government utilizes modern innovations to extend its services and regulatory power to audiences in an open technological expanse, without constraints or borders.

"VARA represents a serious effort to build a new, powerful economic sector that contributes to the nation’s economy and creates new investment opportunities, and this is possible through the safe and modern regulatory solutions we envision. Our presence in the Metaverse, therefore, marks the beginning of a new phase in the Dubai Government’s march for the future; one that will have a positive impact in the long run.”

“VARA has been established as a mission-focused regulator, to nurture and safely scale a rapidly decentralizing business landscape founded on four cornerstone principles — secure cross-border interoperability, informed investor adoption, market protection prioritization, and responsible industry participation.”

By expanding VARA’s resources to a borderless audience through the Metaverse, Dubai is creating a prototype Decentralised Regulator Model, inviting international thought leaders — global authorities, governance custodians, and industry shapers — to participate, exchange knowledge, and problem-solve collectively so that we enable the dynamic virtual assets sector to build economic resilience, accelerate social inclusion, and address environmental sustainability.”

Beyond gaming and VASPs, VARA connects private sector game-changers, inventors, and market movers spanning ICT, financial and professional services, lifestyle, entertainment, and FMCG to promote economic freedom in the Metaverse.

VARA MetaHQ will be its primary channel for engaging VASPs around the world in order to initiate applications, allow younger licensees to enter the metaverse, and openly share knowledge and experiences with consumers and peer regulators in order to raise awareness, enable safe adoption, and drive global interoperability.

VARA isn't the only corporation that has declared plans to set up shop in the metaverse this year. VARA, on the other hand, was one of the first regulators to do so. The US Securities and Exchange Commission said on Tuesday that it will increase its crypto enforcement section by 20 personnel to be "better positioned to monitor misbehavior in the crypto markets," but no such move into the metaverse has been announced.

Furthermore, Director-General Helal Saeed Almarri expressed Dubai's views on virtual assets as "the future global economy's driver." VARA, according to Almarri, is the "world's first specialist regulator for the VA sector."

Despite VARA's metaverse effort, Dubai remains on the list of countries with the tightest cryptocurrency rules. As a result, without the consent of the VARA, no crypto service provider may operate in the nation. Failure to do so may result in the permission being suspended or canceled. Physical laws may impede labor in the digital domain as VARA expands into the metaverse.

Despite the fact that The Sandbox does not have the highest market capitalization, it is still one of the most popular virtual worlds with brands and corporations such as HSBC Bank, Snoop Dogg's Snoopverse, and now regulatory authorities.

However so, the reduction seen in sales and users since February can become a cause of concern.

This wise decision demonstrates Dubai's faith in virtual assets. It is crucial to the country's future digital economy and its desire to establish the Emirate as the worldwide capital of virtual assets.

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