Decentralized Physical Infrastructure Protocol (DePIN) peaq has signed a memorandum of understanding with Dubai’s Virtual Assets Regulatory Authority (VARA) to develop a regulatory framework for onchain robotics and tokenized machines.
According to Thursday’s press releasethe memorandum focuses on Peaq’s Machine Economy Free Zone and covers additional areas of collaboration, including guidance on projects seeking VARA licensing, joint technology and compliance training initiatives, and data sharing to support research and regulation.
Launched in July, the Machine Free Zone is a controlled environment where you can test how robotics and artificial intelligence can function in decentralized networks.
Peaq co-founder Max Thake said the agreement “represents an important commitment by both parties to bring the machine economy to life in a compliant way and enable people to participate in, build and benefit from an entirely new sector of the economy.”
Peaq is a layer 1 blockchain for the machine economy, a network in which connected devices and robots can own resources, share data and to earn income. It forms the basis of DePIN and tokenized real-world assets.
VARA is Dubai’s regulatory agency for cryptocurrencies and digital assets. Founded in 2022, it oversees licensing, compliance and policy for virtual asset companies across the emirate.
The announcement comes about a week after VARA entered into a strategic partnership with DMCC, the government-backed Dubai Goods and Business Free Zone, to develop a regulatory framework for tokenized goods.
VARA CEO Matthew White said the agency’s goal is to “position Dubai as a global benchmark for the safe and sustainable growth of this next-generation asset class.”
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Since its establishment in March 2022 to oversee cryptocurrency and Web3 regulation, VARA has helped transform Dubai and the wider UAE into one of the world’s leading centers for digital assets and blockchain innovation.
On May 19, VARA updated its rulebook for virtual asset service providers (VASPs) operating in the country, clarifying the issuance and distribution of risk-weighted assets. According to UAE law firm NeosLegal, the novel rules will allow people to list risk-weighted assets and list them on secondary markets.
In August, VARA and the United Arab Emirates Securities and Commodities Authority (SCA) formed a strategic partnership to synchronize their approach to regulating digital assets. Under the agreement, the Dubai-based licenses will be valid throughout the United Arab Emirates.
On September 22, the United Arab Emirates signed a multilateral Competent Authority Agreement under the Crypto-Asset Reporting Framework (CARF) to establish automatic exchange of tax information on crypto assets among member countries. The Ministry of Finance announced that the framework will enter into force in 2027, and the first data exchange is scheduled for 2028.
Dubai and the United Arab Emirates’ approach to digital assets has, unsurprisingly, attracted a migration of wealthy crypto investors. The United Arab Emirates has become a top destination for millionaire migration, with around 9,800 people expected to relocate There in 2025.
Chase Ergen, a board member of the investment company DeFi Technologies, predicts that within five years the cryptocurrency sector will become the second largest industry in the United Arab Emirates.
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