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Expanding horizons: Taiwan and Dubai deepen exchanges in financial technology and virtual assets
Fintech innovation regulatory policies rely on continued international exchanges and learning. During the TOKEN2049 blockchain event held in Dubai in mid-April, Tsai Yu-ling, honorary chairman of the Taiwan Fintech Association, led the association’s industry players to visit the local Virtual Assets Regulatory Authority (VARA) in Dubai, including Weight Technology Co., Ltd., Fusheng Digital Co., Ltd., Heya Digital Technology Co., Ltd., and Tuohuang Digital Technology Co., Ltd. conducted an in-depth exchange of industrial supervision experience with Matthew White, CEO of VARA.
As an autonomous entity with legal status and financial independence, VARA is responsible for protecting and regulating stakeholders in virtual asset services. This organization is responsible for supervising the issuance, provision and disclosure of virtual assets (including FT and NFT). It also cooperates with federal agencies such as the Central Bank of the United Arab Emirates to jointly formulate ethical codes, policies and strategic plans.
In Dubai, any operator that provides virtual asset services must obtain a VARA license and have a corresponding commercial institution trade license to operate. Entities that violate Dubai’s virtual asset regulatory laws may face severe penalties, including license suspension.
At this exchange meeting, the two parties deepened their understanding of each other's regulatory frameworks for financial technology and virtual assets, and jointly discussed VARA's regulatory framework.
In the face of financial technology innovation and the rapid development of virtual asset services, the Dubai government authorities are committed to providing a stable regulatory environment for industry players while maintaining an open attitude towards innovation. The principle-based supervision model enables both regulatory agencies and industry players to focus more on the value that products and services themselves bring to industrial innovation and development, and pay more attention to the activities and behaviors of industry players. This regulatory approach gives industry players a certain degree of flexibility, allowing them to adapt and innovate in a rapidly changing market, while ensuring consumer protection and market stability.
Explore VARA’s innovative regulatory strategies
During the meeting, VARA representatives explained in detail the two-stage process for license application: initial approval and full document review, which ensures that all operators wishing to operate virtual asset services in Dubai comply with local laws and regulations. VARA's transparent process and strict regulatory standards reflect the regulatory authorities' attitude towards high-quality financial services.
In addition to providing guidance on license applications, VARA also shared with us how it provides necessary support and establishes partnerships for virtual asset service providers.
In the face of operators who want to apply for licenses and are already providing services, VARA continues to maintain a "one-on-one" smooth communication channel with each operator to keep abreast of the latest developments and business plans of the operators; in the face of the basic needs of the operators in running the company VARA also actively communicates with local banks, accounting firms and other financial service institutions to continue to help more institutions understand and support virtual asset-related businesses, including supporting licensed operators to complete financial services such as bank account opening and trust, and remittance. Comprehensive list of accountants who are familiar with crypto industry audits to ensure that operators can operate smoothly while complying with local regulations.
The friendly interaction between regulatory authorities and industry players has enhanced the operating capabilities and business motivations of industry players in the Dubai market, and has also helped consolidate Dubai’s development environment for global innovative financial technology. For global virtual asset service providers, Dubai provides an ideal opportunity to enter the international market through the platform created by VARA.
Innovation Boost: VARA’s Supervisory Sandbox and Enterprise Support
Maintaining market stability while encouraging innovation is one of VARA's core strategies.
VARA creates a regulatory sandbox tailored for virtual asset service providers, allowing them to test new products and services in a mentored, controlled environment without having to meet all the usual regulatory requirements immediately.
While industry players develop new products or services, regulatory authorities also provide compliance guidance on a rolling basis in line with their regulatory principles. This provides entrepreneurs with a unique opportunity to evaluate the potential impact and effectiveness of new ideas before they are launched in the market. VARA representatives said the regulatory sandbox was designed to reduce risks in the innovation process while collecting practical data on new technologies and business models to optimize its long-term regulatory framework.
For new start-ups that do not have enough capital to independently complete license applications and compliance structures, VARA is also developing a trial operation method by "having mature companies provide the umbrella of the regulatory framework, and allowing new start-ups to serve as subordinates of the framework." Gradually establish a compliance system that is suitable for new startups. This plan has not yet been officially implemented, but it is a reference method that can help new companies reduce initial operational complexity and costs and speed up their entry into the market.
Dubai: The forefront of innovation in virtual asset regulatory strategies
As of April 17, 2024, a total of 17 cases have successfully obtained the Virtual Asset Service Provider License (VASP Lisence) issued by VARA, and these cases come from companies from various countries, demonstrating Dubai’s geographical and economic policy advantages, which are enough to serve as A springboard to expand into the Middle East and even global markets. In addition, VARA not only supports the business development of settled companies, but also actively engages in dialogue and cooperation with regulatory agencies in other countries to ensure the compliance and efficiency of cross-border services.
Through this professional exchange meeting between the Taiwan Fintech Association and VARA, we also look forward to gaining more interaction and cooperation on the common goals of promoting global technological innovation and improving business compliance, and we also look forward to Taiwan's VASP start-ups. , can explore more opportunities for cross-border expansion and cooperation through the platform established by VARA.