- Policies Imposed by VARA
- Reasons for the Regulations by VARA
- Fines Involved in Breaking the Rules Imposed
- The Mechanics of Privacy Coins Revealed
The Dubai Virtual Assets Regulatory Authority (VARA) has implemented policies to make Dubai a prominent hub for virtual assets globally. It has outlawed any dealings with privacy coins XMR and ZEC.
Policies Imposed by VARA
Based in Dubai, the Virtual Assets Regulatory Authority (VARA) released its eagerly anticipated rules for the regional cryptocurrency business on February 7th, 2023. Ten fundamental principles are outlined in these regulations, including licensing requirements, money laundering regulations, marketing standards, and prohibition of privacy-oriented cryptocurrencies like XMR and ZEC.
VARA views privacy-focused cryptocurrencies as virtual assets that, by using public ledgers, hinder transaction tracing or ownership identification and for which there is no mechanism to identify or trace ownership.
Reasons For the Regulations by VARA
The new rules are intended to increase security for local consumers and position Dubai at the forefront of blockchain technology. Several businesses in Dubai accept payment by cryptocurrencies, such as some building companies like Emaar Properties and DAMAC, who accept the use of Bitcoin and
Ethereum. Emirates Airline, the leading Airline in the United Arab Emirates, laid out plans to accept Bitcoin as payment and use blockchain technology to track the history of planes.
Fines Involved in Breaking the Rules Imposed
Fines for breaking the rules can range from $5.4 million for individuals to $31.6 million for companies that deal in virtual assets. In addition, Dubai and its unique development and free zones are both subject to VARA regulations, except for the Dubai International Financial center, which a different agency governs.
As a result, Dubai is heavily invested in delivering a transparent and secure virtual asset habitat despite the due diligence procedure.
The Mechanics of Privacy Coins Revealed
Cryptocurrencies use public blockchains to track transactions that include the sender, recipient, and trade amount. The most popular privacy coins include Monero and Zcash, which use various methods to hide this information.
For example, Monero makes it challenging to determine who took part in a transaction and how much money was traded using stealth addresses and ring signatures to obscure transaction details. Ring Confidential Transactions (RingCT) is another feature that hides the amount of XMR traded in a transaction.
It employs private transactions to conceal the transferred amounts and ring signatures to conceal the sender’s identity among various potential signers. These two technologies work together to guarantee transaction confidentiality giving Monero users more security and privacy.
Zcash has features that allow users to choose between t-addresses (non-private) or z-addresses (private), which are validated by zero-knowledge proofs and conceal transaction data from third parties. It is feasible to see that a transaction occurred between two z-addresses at a given moment, but the participants and the dollar amounts remain