On Tuesday, February 7, 2023, the Dubai Virtual Asset Regulatory Authority (VARA) released guidelines for the regulation of the local cryptocurrency industry. The guidelines identify ten core principles for the industry, which include licensing requirements, anti-money laundering obligations, marketing agreements, and a ban on cryptocurrencies with strong anonymity, such as Zcash and Monero.

Dubai defines a cryptocurrency with strong anonymity as "a virtual asset" that "impedes the tracking of transactions or ownership through the use of distributed ledger technology, for which no technology or mechanism is currently available for service providers to track or identify ownership." Due to the anonymous nature of such cryptocurrencies, the country's government has put in place regulations to monitor their related use and transactions.

According to the new rules, virtual asset service providers must be licensed by VARA, and large proprietary traders investing $250 million or more in cryptocurrency businesses must register with VARA. VARA also has the power to revoke a company's license in case of breach of the directive or bankruptcy, and to set fee requirements for services provided.

Individuals who violate the rules face fines of up to $5.4 million, and businesses involved in virtual assets face fines of up to $13.6 million. The new VARA rules apply not only to the Dubai region, but also to Dubai Special Development Zones and Free Zones (with the exception of the Dubai International Financial Centre, which is regulated by other bodies).