UAE Planning Nationwide Crypto Licensing Regulations

The United Arab Emirates (UAE) is set to have a general crypto regulation that’ll cover every part of the county. 

UAE to Introduce Broad Crypto Regulations

According to a report from Bloomberg, the country will be issuing a federal crypto license for virtual assets service providers in the first quarter of the year. It claimed that the UAE Securities and Commodities Authority (SCA) is already in the final stages of formalizing the legislation.

This new law will make it possible for crypto companies and businesses to operate in the country. It’s believed to be part of the country’s attempt to establish itself as a crypto-friendly nation.

In drafting the new laws, Bloomberg stated that authorities considered cryptocurrency regulations in countries such as the U.S., U.K., and Singapore. It also got guidance from the Paris-based Financial Action Task Force (FATF) guideline.

The SCA and Central Bank will regulate the industry but each region would have the freedom to determine licensing requirements and operations within their zones. It is expected that such a hybrid approach will further fast-track the development of crypto regulations in the country.

The report also hinted that UAE authorities were also planning to develop a regulated crypto mining system.

UAE Free Trade Zones Attract Crypto Firms

While this would be the first nationwide regulatory action, several free trade zones already have their crypto regulatory frameworks. 

In 2018, the Financial Services Regulatory Authority introduced digital assets regulations for Abu Dhabi Global Markets. The government also declared the Dubai World Trade Centre (DWTC) as a comprehensive zone and regulator for digital assets in 2021.

A broader crypto law will undoubtedly encourage more digital assets firms to move to the country. Already, Binance signed a memorandum of understanding with the DWTC last year to help other companies and service providers access the UAE market. 

UAE is currently the third-largest crypto market in the Middle East after Turkey and Lebanon.