WHY THIS MATTERS IN BRIEF
Regulators are often way behind the curve when it comes to learning about new technologies and innovations, and the risks involved, but Dubai’s VARA is bucking the trend.
As the Metaverse takes shape, from a really low base and really slowly, Dubai’s Virtual Assets Regulatory Authority (VARA) has announced it’s entered into the metaverse with the establishment of its Metaverse HQ, making it the first regulator to have a presence in the emerging digital space.
The expansion of VARA’s resources to a borderless audience is part of Dubai’s strategy to create a prototype decentralised regulator model. It also aims to make it accessible to government and industry leaders, other authorities and virtual asset service providers to help shape the future digital economy, The Executive Office said in a statement on Tuesday.
MetaHQ will serve as the primary channel to engage global virtual asset service providers to initiate applications, welcome new licensees, share expertise and drive worldwide interoperability, it added.
VARA’s MetaHQ will utilise The Sandbox platform, the Ethereum blockchain-based application backed by Japanese investment conglomerate SoftBank, that allows users to create, sell and purchase digital assets.
The “bold move” will be “ushering a new era” that will see the Dubai government leverage modern innovations to “extend its services and regulatory power to audiences in an open technological expanse, without constraints or borders”, Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, said.
“Dubai maintains a leading position at the forefront of technological transformation. We have exceeded the role of an early adopter to become an innovator and participant in shaping the future of this technology,” Sheikh Hamdan said.
“VARA represents a serious effort to build a new, powerful economic sector that contributes to the nation’s economy and creates new investment opportunities, and this is possible through the safe and modern regulatory solutions we envision.”
Vara was established by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, on March 9 under the Dubai Virtual Asset Regulation Law, the first law in the emirate that regulates virtual assets.
The body aims to create an advanced legal framework to protect investors and provide international standards for virtual asset industry governance to enable responsible business growth in the emirate.
The metaverse is the emerging digital space in which people, represented by avatars or three-dimensional likenesses, can interact in virtual worlds. It is part of Web 3.0, which is being touted as the next iteration of the World Wide Web, with blockchain, decentralisation, openness and greater user utility among its core components.
These new-age technologies are opening up new benefits, with more companies tapping into its potential by developing more use cases to streamline economic and societal activities.
Vara’s MetaHQ will “enable the dynamic virtual assets sector to build economic resilience, accelerate social inclusion and address environmental sustainability”, Sheikh Hamdan said.
“Our presence in the metaverse, therefore, marks the beginning of a new phase in the Dubai government’s march for the future, one that will have a positive impact in the long run.”
In the UAE, metaverse activity is growing. Dubai Municipality, in March’s World Government Summit, said it will create a digital twin city of the emirate in a virtual world, called One Human Reality. Sharjah, meanwhile, held its first non-fungible token art exhibition at House of Wisdom in March.
The global metaverse industry, which was valued at $47.69 billion in 2020, is projected to grow at a compound annual rate of 43.3 per cent to $828.95bn in 2028, according to Emergen Research.
Web3, meanwhile, is expected to be valued at about $6.2bn in 2023, and is projected to grow at a CAGR of 44.6 per cent from 2023 to 2030, according to Market Research Future.
Tuesday’s announcement will see VARA join private sector game-changers, innovators and market makers across a number of vital industries. These include ICT, finance, professional services, lifestyle, entertainment and fast-moving consumer goods to enable economic freedom in the metaverse, the statement said.
“Dubai views the virtual asset industry as the driver of the global future economy,” Helal Almarri, director general of the Dubai World Trade Centre Authority, said.
“VARA’s acquiring land in The Sandbox is symbolic of our belief in this sector, and the onus is on us as government to be the bridge that allows investors and consumers to safely adopt, and collaboratively scale the economy.”
Source: UAE Govt