UAE Is Preparing to Issue Crypto Licenses and Become the Industry Hub
The United Arab Emirates (UAE) is working on issuing federal licenses to crypto service providers by the end of the first quarter of 2022. The latest decision comes after the UAE signify a memorandum of understanding (MoU) with crypto exchange Binance recently in December 2021.
As per the latest Bloomberg report, the UAE Securities and Commodities Authority is currently in the final stage of finalising the legislation that would allow crypto firms to set the base in the country. Thus, having a country-wide crypto licensing legislation would help the UAE of attaining its goal in becoming a leading crypto-friendly jurisdiction.
To create the framework of the crypto licensing legislation, the UAE regulators are looking into the Paris-based Financial Action Task force (FATF) guidelines as well as other ongoing crypto policies in the U.S, U.K and other regions.
As per report, UAE’s crypto license will take an hybrid approach. Here, the chief regulatory body will handle regulations in consultation with the central bank. On the other hand, the local financial institutions will have the liberty to develop their own native license guidelines.
In addition to providing the licensing framework for crypto service providers, the UAE government also plans to build and regulate the crypto mining industry. As per the latest report, UAE regulators are working on creating a law that would pave way for crypto and blockchain adoption.
As a result, the crypto licensing and mining legislation will help UAE to move one step closer to their goals.
With the MoU signed with Binance last December, the government has further declared the Dubai World Trade Centre (DWTC) as a comprehensive crypto zone and a regulator for digital assets.
Last year in March 2021, the Dubai Multi Commodities Centre, which is one of the largest free trade zones in the UAE had setup regulatory framework for crypto firms and has already offered licenses to 22 companies.
In May 2020, Abu Dhabi’s International Financial Centre issued the first crypto exchange license to Matrix. Last year in November 2021, three exchanges headquartered at the center became fully operational.