Dubai’s cryptocurrency sector is witnessing significant transformations, with new efforts aimed at supporting smaller players who are currently weighed down by heavy regulatory costs.
Matthew White, the CEO of Dubai’s Virtual Asset Regulatory Authority (VARA), spoke about these challenges and the authority’s plans to address them during the Paris Blockchain Week.
White revealed that VARA is actively seeking ways to improve the regulatory framework for cryptocurrencies, acknowledging the existing system’s imperfections and the disproportionate impact on smaller entities.
He expressed a commitment to making adjustments that would benefit all market participants.
“It’s not perfect. There’s a number of things I’m looking at, at the moment, to try and make the regime fit for everybody. One of those is figuring out a way to deal with the costs of compliance for smaller entities,” White stated during a panel discussion.
The process of becoming regulated is notably expensive, which poses a significant barrier for many smaller companies in the crypto space.
This has prompted VARA to explore innovative solutions to alleviate these financial burdens. White proposed a model where larger, more established players could support smaller entities.
“The cost of compliance is borne by the larger systemic players, and this allows the smaller players to come into the ecosystem, be regulated, but also not have to suffer the same sort of level of costs of compliance that we’ve got,” he explained.
This initiative is part of VARA’s broader strategy to foster innovation while ensuring robust regulatory oversight.
White highlighted the dynamic nature of the cryptocurrency market and the regulatory challenges it presents, emphasizing the authority’s ongoing efforts to keep pace with the industry’s rapid development.
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“It moves so quickly.
“We don’t pretend to know everything as a regulator,” he remarked, underlining the complexity and fast-evolving landscape of digital assets.
These discussions and plans come after significant leadership changes within VARA.
White took over the role of CEO from Henson Orser as part of a broader strategy to enhance the regulatory body’s operations in anticipation of scaling up to full market activities.
His appointment on November 16 was timed closely with tightened regulations in the UAE, including new fines and sanctions aimed at unlicensed virtual asset service providers (VASPs), introduced in joint guidance issued on November 8.
This alignment indicates a clear push towards stricter compliance and oversight in the UAE’s virtual asset sector.
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