VARA defines issuance rules as global standard for asset reference tokens
[ad_1]
The Dubai Virtual Asset Regulatory Authority (VARA) takes the first regulatory position of its kind in issuing specific categories of Virtual Assets backed by Real World Assets, including but not limited to FIAT, offering greater assurance of cross-border interoperability.
The September 2023 edition of VARA’s Virtual Asset (VA) Issuance Rulebook makes the Dubai regime one of the first in the world to proactively establish prudential requirements for two specialized categories of tokens that maintain a stable value versus its underlying asset class.
In the context of FIAT Reference Virtual Assets (FRVA), it is critically worth noting that assets specifically designed to maintain a stable value relative to the UAE dirham are designated to be under the exclusive purview of the Central Bank of the UAE. UAE, making it a world first. to provide much-needed clarity on stablecoin issuances. VARA’s FRVA rules apply specifically to non-AED FIAT issuances and have attracted significant attention from global authorities seeking collaboration to regulate virtual assets with improved synchronization and interoperability.
The latest edition of this VA Issuance Rulebook represents a significant step in establishing a safe VA ecosystem in Dubai backed by a robust regulatory framework for greater consumer protection, thereby reinforcing safe VA adoption with a secure bridge between the TradFi and DeFi ecosystems.
It ensures that VA issuers meet the highest standards of risk assurance, market stability and transparency, especially with respect to the issuance of tokens that are expected to provide stable value against their underlying asset in the real world.
VARA has maintained that its regime is designed to make its regulations responsive to market needs and agile to ensure that global market risk can be proactively mitigated.
The updated rulebook covers a variety of regulations, including licensing, approval and registration requirements, with a specific focus on technical documents and public disclosures, issuer compliance obligations, supervision, examination and enforcement. It specifically contemplates the requirements for the issuance of Asset Reference Tokens (ART) with a dedicated annex outlining the regulations for FRVAs.
This rulebook specifically prioritizes alignment with the UAE’s rigorous efforts to combat anti-money laundering (AML) and counter-terrorism financing (CFT) activities, while improving market stability and transparency.
News source: Emirates News Agency
[ad_2]
