September 27, 2023
VARA adds licences for staking.
Late in August, the Virtual Asset Regulatory Authority (VARA) in Dubai updated its still recent Custody Services regulation to add in a new section for custody staking. Requirements would cover compliance with staking requirements, specific rules for adhering to client instructions, segregation and sakekeeping of virtual assets, rules around node management and DLT standards, a specialised risk disclosure statement and pre-approved client agreement templates.
Custodians have faired well in VARA’s licensing process thus far with Hex Trust already operating with an MVP Operational licence and Koimanu/Lazer Digital obtaining their full VASP licence.
Adding staking licensing that is curated for custodians is an important move as it overall reduces licensing fees and regulatory burden on custodians who would otherwise need to obtain a separate licence for VA Management and Investment in order to offer custody solutions for its clients.
Plain and simple, this is innovative thinking and the kind of rapid adaptability we like to see and hope to continue to see from regulators operating in this sector. As professionals in the Web3 space, we are increasingly accustomed to the fact that the industry moves rapidly and developments are quick-fire and unrelenting. For a regulator to demonstrate their willingness to try to keep up with this pace and change and evolve to the needs of VASPs is not only laudable, but unheard of.
To me, it strengthens the view that the UAE is the fastest growing crypto hub and is unrivalled in its ability and willingness to support emerging technologies.