Dubai, a global financial hub known for its innovative approach, is reinforcing regulations concerning the use of cryptocurrencies, such as Bitcoin, in property purchases and other retail transactions. As Dubai introduces stricter guidelines for virtual asset usage, consumers engaging in such transactions are now benefiting from increased protection and compliance standards.
“To ensure compliance, businesses and individuals should understand the new guideline specifics for crypto usage in these contexts (in B2C transactions),” emphasized Niraj Jain, UAE Practice Lead at Indigenesis Consulting. He further emphasized the importance of aligning with the Financial Action Task Force (FATF) standards on anti-money laundering and counter-terrorism financing (AML/CFT).
In essence, individuals and businesses using cryptocurrencies for transactions must adhere to stringent requirements similar to those applied in traditional banking transactions. Whether it’s purchasing a hotel stay or buying a cup of coffee using Bitcoin or other cryptocurrencies, the responsibility lies with the involved parties to ensure all necessary compliance measures are met.
Dubai’s Virtual Asset Regulatory Authority (VARA) is intensifying compliance procedures and extending the coverage of its rules. In collaboration with the Dubai Department of Economy & Tourism (DET), VARA is deploying comprehensive processes to ensure robust consumer protection and security standards in virtual asset transactions across the mainland and free zones.
The aim is to establish full transparency within businesses handling virtual assets. Regulators are focused on enhancing existing rules and regulations as needed. Bal Krishen, Chairman and CEO of Century Financial, stated, “The DET and VARA guidelines aim to regulate and provide an overall framework for Virtual Asset Service Providers.”
These guidelines extend their scope beyond investors trading through licensed platforms. Entities eligible for a regulated Full Market Product (FMP) License are expected to transition to a VARA-regulated regime by August 31. The guidelines provide specific and practical directives on utilizing virtual assets across various transaction categories.
Dubai’s Department of Economy & Tourism (DET) will incorporate VARA’s activities into its systems for all virtual asset license issuance. It will handle inspections and support VARA with on-site enforcement, including penalties for negligence or non-compliance with VARA rules.
The collaboration ensures a seamless customer experience, bolstered by the Dubai Corporation for Consumers Protections & Fair Trade department within DET. This upgrade in expertise will enhance consumer protection in the virtual asset space, fostering a safer environment for individuals and businesses alike.
In a statement issued by VARA, it was highlighted that both parties will work together on awareness campaigns for VARA product and licensing updates, data-sharing protocols, and legacy onboarding. This collaboration underscores Dubai’s commitment to creating a pro-business and pro-growth environment for all stakeholders involved in the rapidly evolving virtual asset landscape.