Crypto regulation has come a long way. It is no longer a transitional game between different government agencies: Digital assets now have dedicated supervisors in many regions.
One of the pioneers in the room is Dubai’s Crypto regulator, The Virtual Assets Regulatory Authority (Vara). What separates Vara is its ability to effectively communicate guidelines and regulation to cryptic companies, according to its senior official.
“Set and forget doesn’t work for crypto, it’s about feedback and open channels,” said Sean Mchugh, Senior Director of Market Insurance at Vara. “Since we are focused solely on crypto, it allows us to get a little deeper into the technique and our rules are written for modern times.”
Dubai has become a crypto treasure that arises as one of the preferred choices for non-native crypto companies to create a store and access the region and beyond.
“Dubai is seen as a big jumping point. We’ve seen a lot of [crypto] Businesses from Europe and in addition to coming here, and the opposite is also true, we see a lot of companies from another side of Asia coming here. It is a strategic feature and the legislative clarity helps them, ”added Mchugh.
Tokenization and beyond
The real world’s tokenization or RWA wins a lot of traction in Dubai and for good reason. The region’s real estate agency, Dubai Land Department (DLD), recently started a pilot to register and transfer property on blockchain. The tokenization initiative is promoted by Vara and Dubai Future Foundation (DFF).
The integration of real estate into blockchain could strengthen the city’s massive real estate market. DLD expects tokenized real estate to jump to $ 60 billion ($ 16 billion) by 2033, accounting for 7% of Dubai’s total real estate transactions.
Mchugh, who talks to Coindesk at Vara’s Office, thinks real estate is just the beginning.
“It’s very popular, not only in Dubai, but beyond. Dubai has the ability to get things done faster,” he said, adding that they also see a lot of precious metal -tookenization projects.
Vara, with its quick approach to regulation, is careful to see the space, he said.
“Whether it’s real estate, precious metal or other asset, a big part of my focus is on this customer protection. So especially when you come to fraction, it brings a lot of new capital and retail investors to be protected,” he said.
“We ask a lot of questions when it comes to RWA projects, what’s the token? What exactly do I own? What is it and who is the liquidity provider? Reason for investors (institutional or otherwise) do they need a liquidity event to get out. And this is the type of thing we drill down with each project,” emphasized Mchugh.
Interagcy collaboration
The Donald Trump administration has opened up for crypto in the United States, and after industry leaders pressed industrial leaders other regions to follow. This is not necessarily the case in UAE, especially with Vara, which was established three years ago, long before the US president became an open spokesman for digital assets.
Mchugh believes that interagecy collaboration will be the key to Global Krypto regulation but see no particular agency leading the charge.
“I don’t think we would see any super regulators, regional or otherwise. I think every agency is focused on its own customers,” he said, adding that Memoranda of Understanding (MOU) and open communication between governing bodies is the way to successfully monitor crypto.
Whether it is exchanges, web3 or RWA, the future of crypto in Dubai looks bright and Mchugh, who was the former Chief Compliance Officer in Citadel, said he feels that one of the main reasons for it is the pro-business and the start of the city.
