By the end of the first quarter, the United Arab Emirates is expected to grant a federal cryptocurrency licence to virtual asset service providers.
According to Bloomberg, the UAE Securities and Commodities Authority is nearing the completion of legislation. That will allow digital asset firms to establish a presence in the country. The UAE’s goal of becoming a top crypto-friendly jurisdiction would be aided by a national crypto licence law.
Additionally, for developing its crypto licence 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. Besides, 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 officials are working on drafting legislation that will facilitate the use of cryptocurrency and blockchain technology. The recently announced crypto licence and mining legislation may bring us closer to that goal. The Dubai World Trade Centre (DWTC) designated as a comprehensive zone and a cryptocurrency regulator by the government in December 2021.
Binance has set its sights on the UAE market
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 licence 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.