The crypto licence bill might be the country’s first crypto-focused legislation. Various free zones in the country, on the other hand, had implemented crypto rules as early as 2018.
By the end of the first quarter, the United Arab Emirates is expected to issue a government crypto licence for virtual asset service providers (VASPs).
According to Bloomberg, the Securities and Commodities Authority (SCA) in the United Arab Emirates is close to adopting legislation that would allow digital asset firms to set up shop in the country. The UAE’s goal of becoming a prominent crypto-friendly jurisdiction would be aided by enacting national crypto licence legislation.
For developing its crypto licence regulations, the regulators apparently reviewed the Paris-based Financial Action Task Force standards as well as continuing crypto policies in the United States, the United Kingdom, and Singapore. According to reports, the new crypto licence would adopt a hybrid approach, with the principal regulatory agency handling regulations in cooperation with the central bank and local financial institutions developing their own native licence standards.
In addition to the crypto licence, the UAE government intends to develop and regulate the crypto mining business.
As previously reported, UAE regulators have been working on legislation that will allow crypto and blockchain use. The recently proposed crypto licence and mining regulations may be a step in the right direction. The Dubai World Trade Centre (DWTC) was designated as a comprehensive zone and a regulator for cryptocurrency by the government in December 2021.
Binance, one of the most popular cryptocurrency exchanges, has set its sights on the UAE market, having inked an exclusive memorandum of understanding (MOU) with the Dubai Financial Services Authority (DWTC) in December. Binance will aid DWTC in becoming a crypto hub in the region, as well as crypto exchanges and service companies seeking access to the UAE markets.
» Dubai World Trade Centre to become comprehensive zone and regulator for virtual assets and Crypto https://t.co/Ndr6GDcJ4u
— CZ 🔶 Binance (@cz_binance) December 20, 2021
While the legislative foundation for a crypto licence is likely to be in place by the end of the first quarter, the UAE has a number of free zones with tax and regulatory regimes that are more permissive.
These free zones were among the first to implement digital asset and tokenized security legislation. The Financial Services Regulatory Authority (FSRA) governed Abu Dhabi Global Markets (ADGM) was the first to implement digital asset laws in 2018.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.