At a time when more countries are considering legislation to provide a license to service providers in the cryptocurrency industry and boost their economic potential through providing a conducive environment for businesses to flourish, decision-makers in the UAE are planning to formulate national crypto regulations in the Middle Eastern States despite having various free zones in some regions as far back as 2018.
The United Arab Emirates plans to roll out a crypto license to regulate the activities of digital asset service providers in the last days of Q1 later in the year. According to Bloomberg, the business regulatory authority of the Gulf nation is at the final stages of completing the draft legislation that would pave the way for firms in the digital space to launch their businesses in the UAE.
A federal cryptocurrency licensing system would position the UAE as a friendly crypto ecosystem, thereby attracting top players and investors to the Gulf nation.
The UAE’s crypto regulation is modelled after the various policies in France, the U.S., Singapore, and the U.K. According to the regulators, the new legislation takes a hybrid approach to operations in partnership with the central bank, allowing the local financial institutions to frame their guidelines.
In addition to the above plans, the UAE authorities are also building and regulating the cryptocurrency mining industry for efficiency. The goal is to make the UAE a desirable hub for digital assets and technology through changes in the authorities’ policies.
What The UAE Has Done So Far
Cointelegraph has earlier reported the move by UAE regulators toward drafting laws to pave the way for cryptocurrency and blockchain adoption in the Gulf nation. And as expected, the latest crypto regulations would bring the government’s vision a step closer to achieving its goal. Last December, the UAE government declared Dubai’s trade centre (DWTC) as an inclusive zone and regulator for digital currencies.
The world’s largest cryptocurrency exchange platform, Binance, has identified the UAE market as a potential business partner during an event in Dubai when signing a partnership deal with the centre’s management in December. The agreement will see Binance using its expertise to transform the DWTC into a digital asset headquarter in the region and assist interested crypto exchanges. Other service providers to access the UAE market.
Other Free Zones In The Region
The legal process for the crypto regulation and license is predicted to be ready toward the end of the first quarter of the year, and it is not the first regulation to be carried out in the Gulf nation. Before this, there existed free zones with friendly taxation and regulatory guidelines.
Those free zones are part of the first trading centres in the world to adopt tokenized security laws and digital legislation to monitor digital trading activities. For instance, the Abu Dhabi market, supervised by the statutory regulatory body in the UAE, was the first to adopt the new regulation for the digital space as far back as 2018.