The decentralized physical infrastructure (DePIN) protocol peaq has entered into a memorandum of understanding with Dubai’s Virtual Assets Regulatory Authority (VARA) to create a regulatory framework for on-chain robotics and tokenized machines.
In a press release on Thursday, it was noted that the memorandum focuses on peaq’s Machine Economy Free Zone, with potential collaborations that include offering guidance to projects pursuing VARA licenses, joint training in technology and compliance, and sharing data to aid research and regulation.
Established in July, the Machine Economy Free Zone serves as a testing ground for exploring the functionality of robotics and AI within decentralized networks.
Co-founder of peaq, Max Thake, remarked that this agreement “signifies a significant commitment from both parties to realize the Machine Economy in a compliant manner, allowing individuals to engage, develop, and benefit from this new economic sector.”
Peaq operates as a layer-1 blockchain tailored for the machine economy, facilitating interconnected devices and robots to own assets, share data, and generate income. It serves as the foundation for DePIN and tokenized real-world assets.
VARA functions as Dubai’s regulatory body for cryptocurrencies and digital assets. It was established in 2022 to oversee licensing, compliance, and policy for virtual asset enterprises throughout the emirate.
This announcement follows a recent partnership between VARA and DMCC, Dubai’s government-endorsed commodities and business free zone, aimed at creating a regulatory framework for tokenized commodities.
VARA CEO Matthew White expressed that the agency is dedicated “to establishing Dubai as the global standard for safe and sustainable advancement of this next-gen asset class.”
Related: Report: Singapore and UAE among ‘most crypto-obsessed’ nations
Dubai’s and the UAE’s crypto initiative
Since its inception in March 2022 to regulate crypto and Web3, VARA has played a crucial role in transforming Dubai and the broader UAE into a prime hub for digital assets and blockchain innovation.
On May 19, VARA revised its rulebook for virtual asset service providers (VASPs) operating in the region, clarifying the issuance and distribution of RWAs. The updated regulations allow individuals to issue RWAs and list them on secondary markets, per the legal framework of the United Arab Emirates, as stated by the law firm NeosLegal.
In August, VARA, along with the UAE’s Securities and Commodities Authority (SCA), formed a strategic alliance to synchronize their regulatory approaches to digital assets. This agreement establishes that licenses granted in Dubai will be applicable across the entire UAE.
On September 22, the UAE endorsed the Multilateral Competent Authority Agreement under the Crypto-Asset Reporting Framework (CARF) to facilitate automatic tax information sharing on crypto assets among member nations. The Ministry of Finance announced that this framework will be effective in 2027, with initial data exchanges projected for 2028.
Dubai’s and the UAE’s strategies concerning digital assets have garnered significant attention, facilitating the migration of affluent crypto investors. The UAE has emerged as the leading destination for relocating millionaires, with approximately 9,800 expected to move there in 2025.
Chase Ergen, a board member at the crypto investment firm DeFi Technologies, anticipates that the crypto sector will evolve into the second-largest industry in the UAE within five years.
Magazine: Crypto City: A Guide to Dubai
