UAE to Issue Federal Crypto Licenses by End of Q1 2022
- The new crypto license legislation, which will help the UAE become a leading crypto-friendly jurisdiction, is expected by the end of Q1 2022.
- The UAE has decided to use a hybrid approach to the license, where the central bank and the SCA handle regulations, while financial centers are free to develop their own native guidelines.
View of Dubai, United Arab Emirates Rasto SK / Shutterstock
The United Arab Emirates (UAE) will soon issue federal crypto licenses for virtual asset service providers (VASPs) in a bid to attract more crypto businesses to the area, Bloomberg reported on 17 February.
According to the publication, the UAE’s Securities and Commodities Authority (SCA) is already in the final stages of drafting a legislation that would allow VASPs to begin operations in the country. An anonymous government official told Bloomberg that the new crypto framework should be completed by the end of Q1 2022, and that it would help the UAE get close to its goal of becoming a leading crypto-friendly jurisdiction.
The government official explained that the SCA had take into account the Financial Action Task Force’s guidelines — and approaches taken by the United States, the United Kingdom, and Singapore — when creating the new crypto license legislation. The regulator decided to use a hybrid approach, where the central bank and the SCA would handle regulations, while local financial centers develop their own native license guidelines.
The official further noted that the UAE also wants to build an ecosystem for cryptocurrency mining — and industry that has drawn scrutiny from environmentalists and lawmakers globally — and regulate the industry.
The UAE has taken a positive approach when it comes to crypto for a long time now. The Aby Dhabi International Financial Center, a financial hub and free-trade zone, issued its first crypto exchange license back in May 2020. The government of Dubai, on the other hand, noted it will create a favorable regulated zone for crypto service providers on the Dubai World Trade Center in December 2021.
A day after the Dubai announcement, crypto exchange Binance signed an exclusive memorandum of understanding with the Dubai World Trade Center to help it become a crypto hub in the region, and assist it in creating a crypto regulatory framework.
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Former CEO of FTX Sam Bankman-Fried leaves the Federal Court in New York after pleading not guilty, 3 January, 2022.
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