The Decentralized Physical Infrastructure Protocol (DePIN) has signed a memorandum of understanding with the Dubai Virtual Assets Regulatory Authority (VARA) to develop a regulatory framework for onchain bots and token machines.
According to a press release issued on Thursday, the memorandum focuses on the Automated Economy Free Zone in Beck, with additional areas of cooperation including guidance for projects seeking VARA licences, joint training initiatives in technology and compliance, and data exchange to support research and regulation.
Launched in July, the Machine Economy Free Zone is a controlled environment for testing how robots and artificial intelligence work within decentralized networks.
Max Thicke, co-founder of Peaq, said the agreement “represents an important commitment from both parties to bring the machine economy to life in a compatible way and enable people to share, build and benefit from an entirely new economic sector.”
Peaq is a layer-one blockchain of the machine economy, a network where connected devices and bots can own assets, share data, and earn income. It supports DePIN and token real assets.
VARA is Dubai’s regulatory agency for cryptocurrencies and digital assets. Founded in 2022, it oversees licensing, compliance and policy for virtual asset businesses across the emirate.
The announcement came about a week after VARA established a strategic partnership with the Dubai Multi Commodities Centre, the Dubai government-backed commodity and business free zone, to develop a regulatory framework for token goods.
Matthew White, CEO of VARA, said the agency aims to “position Dubai as a global benchmark for the safe and sustainable growth of the next generation asset class.”
Dubai and the United Arab Emirates are pushing cryptocurrencies
Since its establishment in March 2022 to oversee cryptocurrency and Web3 regulation, VARA has helped transform Dubai, and the UAE more broadly, into one of the world’s leading digital assets and blockchain innovation hubs.
On May 19, VARA updated its rulebook for virtual asset service providers (VASPs) operating in the country, to clarify the issuance and distribution of RWAs. With the new rules, people can issue RWAs and list them on secondary markets, according to UAE-based law firm NeosLegal.
In August, VARA and the UAE Securities and Commodities Authority (SCA) formed a strategic partnership to synchronize their approaches to regulating digital assets. Under the agreement, Dubai-based licenses will apply to the entire UAE.
On September 22, the UAE signed a multilateral Competent Authority Agreement under the Crypto Asset Reporting Framework (CARF) to establish an automatic exchange of tax information on crypto assets between member states. The Finance Ministry said the framework will come into force in 2027, with the first data exchange set for 2028.
It is no surprise that Dubai and the UAE’s approach to digital assets has attracted an exodus of high-net-worth cryptocurrency investors. The UAE has become the leading destination for migrant millionaires, with around 9,800 of them expected to move there in 2025.
Chase Ergen, board member of cryptocurrency investment firm DeFi Technologies, expects the cryptocurrency sector to grow to become the second largest industry in the UAE within five years.
