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Fundamental Principles and Goals

Effective from Feb 07 2023 - Sep 18 2023
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These Regulations are guided by the following fundamental principles for effective regulation of Virtual Assets and VA Activities—
  1. Market integrity and stability: the market should be fair, orderly, transparent, and prevent fraud and other criminal activity. The market should be systemically safe with consideration given to prudential risks. The market can be volatile whilst still being considered to be fair and orderly. The regime should be fully FATF compliant.
  2. Consumer protection: the regime seeks to prevent harms arising from misinformation, abuse and/or poor operational practices. Market participants are free to engage with risk, so long as they give “informed consent” about their investments and VASPs have provided them with all information necessary for such consent in accordance with all applicable laws and regulations.
  3. Technology neutrality and supportive of innovation: the regime must not discriminate against technology, but instead against illicit or harmful activities. If an activity is not illicit, it should be possible and desirable to regulate it without banning it entirely. VARA does not regulate products or protocols as the starting point for achieving its policy goals (except in special cases). VARA does not decide which innovations are subjectively valuable or not.
  4. Regulatory resilience: the regime must not become quickly outdated with loopholes given the fast-paced nature of the industry. The regime is principles-driven and VARA is mindful when it makes prescriptive carve-outs.
  5. Regulatory efficiency and proportionality: enforce a regime that is not only effective [i.e. achieves the policy intent], but does so in the least burdensome way possible for both VARA and VASPs. Any burden imposed is justified relative to the potential harm that is being mitigated.
Underpinning these fundamental principles are VARA’s two primary policy goals, which are to—
  1. promote the Emirate and ultimately the UAE as a safe and progressive jurisdiction worthy of attracting meaningful Virtual Asset growth and innovation, in complement with all related UAE Government programmes, and
  2. position VARA and the UAE as globally trusted and respected in the realm of international law, particularly with respect to FATF compliance, and by designing a system that lends itself to interoperability and passportability.