By the end of the first quarter, the United Arab Emirates is expected to issue a government crypto license for virtual asset service providers VASPs. This move is part of the UAE’s goal of becoming a leading crypto-friendly jurisdiction.
According to Bloomberg, the UAE Securities and Commodities Authority 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 leading crypto-friendly jurisdiction would be aided by national crypto license legislation.
For developing its crypto license regulations, the regulators apparently reviewed the Paris-based Financial Action Task Force standards as well as current crypto rules in the United States, the United Kingdom, and Singapore.
According to reports, the new crypto license 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 license standards.
In addition to the crypto license, the UAE government intends to develop and regulate the crypto mining business.
The UAE regulators are working on legislation that will allow crypto and blockchain adoption. The recently proposed crypto license and mining regulations may be a step in the right direction.
DWTC and Binance partnership
The Dubai World Trade Centre (DWTC) was designated as a comprehensive zone and a regulator for cryptocurrency by the government in December 2021.
Binance, the world’s largest cryptocurrency exchange, has set its sights on the UAE market, having inked an exclusive memorandum of understanding with the Dubai Financial Services Authority (DWTC) in December.
Binance will aid DWTC in becoming a crypto hub in the area, as well as crypto exchanges and service providers in gaining access to UAE markets, as part of the cooperation.
While a legal framework for a crypto license is scheduled 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-regulated Abu Dhabi Global Markets was the first to implement digital asset legislation in 2018.
