The Banking Executive Magazine - October Issue 2022

Virtual Assets Market Growth and Adoption many jurisdictions. Various Central Bank Digital Currency (CBDC) projects in various stages of matu- rity will be underway around the globe. China’s digital Yuan is a prominent example. • New trends: New trends will emerge, such as tokens that allow for fractional ownership of less liq- uid assets (i.e. real estate, carbon or art), driving liquidity premiums and diversification. Other trends include additional services such as professional brokerage services and investment banks dedicated to virtual assets. • Need for more governance: Many of the operational steps are re- quired to make Virtual Assets Serv- ice Providers (VASPs) mature enough for institutionalization. For VASPs to succeed, customer en- gagement, regulatory compliance, clearing and settlement, custody and governance are all necessary in the future. • New technologies: New technolo- gies, like the metaverse, will be de- veloped with great impact on vir- tual assets services and develop- ment. CONCLUSION AND ROAD AHEAD The global market of virtual assets is growing rapidly. More efforts should be undertaken to consolidate global data and information about virtual assets. The increased adoption of the virtual asset market has elicited concerns as to its implications for consumer and investor protection, including issues about data privacy and security; fi- nancial stability and systemic risk; money laundering and crime; na- tional risk; the ability to exercise human rights; and financial inclu- sion. These developments highlight the need to establish a regulation and governance framework to embrace the growth in virtual assets market. Hence, we propose for Arab coun- tries to establish local ministries that looks after virtual assets and digital economy issues. The role of a local ministry for virtual assets is to follow up the development of virtual assets and control the growth of the virtual assets market and provide the needed protection, assistance and advice to the investor. The United Arab Emirates established a ministry for one kind of technology which is Artificial Intelligence, however, es- tablishing a ministry for virtual assets is a more important and crucial step to be undertaken. The various tasks that can be under- taken by a ministry of virtual assets include: • Gathering data resources about vir- tual assets • Conducting advanced analytics about virtual assets • Monitoring the Virtual assets mar- ket • Regulating virtual assets • Issuing licenses for Virtual Assets Service Providers VASP • Developing and supporting train- ing programs to up skills and com- petences in areas related to virtual assets • Establishing cooperation at a global level the BANKING EXECUTIVE 42 ISSUE 166 OCTOBER 2022