UAE to Issue Crypto Licenses in a Bid to Become Global Hub

The United Arab Emirates (UAE) is preparing to issue federal crypto licenses for virtual asset service providers in a bid to become a global crypto hub. UAE Plans to Issue Crypto Licenses Next Quarter According to a Bloomberg report, the UAE Securities and Commodities Authority is planning to issue federal licenses to virtual asset service providers (VASPs) by the end of the first quarter. The securities regulator is already in the final stage of setting up a framework that would allow crypto companies to set up their base in the region. Such a nationwide crypto licensing regulation would help the region become a global leader in crypto-friendly jurisdictions. The regulators reportedly considered the guidelines of the Financial Action Task Force as well as regulatory strategies used in the United States, United Kingdom, and Singapore for framing its crypto license legislation. The new crypto regulation would reportedly take a hybrid approach where the chief regulatory body SCA will regulate the crypto industry with input from the central bank while local financial centres can develop their own licensing guidelines. Apart from crypto licenses, the government of the UAE is also planning on regulating the crypto mining industry. Attracting Crypto Firms in the Middle East In December 2021, the government of Dubai declared that the Dubai World Trade Centre (DWTC) will be a comprehensive zone and a regulator for cryptocurrencies. The next day, Binance signed a cooperation agreement with the trade center. Similarly, the Dubai Multi Commodities Center, the largest free-trade zone in the UAE set up a regulatory framework for crypto firms in March 2021 and has already licensed 22 companies. Abu Dhabi’s International Financial Center, another free-trade zone in the UAE issued its first crypto exchange license to Matrix, in May 2020. As of Nov. 2021, three exchanges headquartered at the center have been fully operational while another three are in the process of launching. UAE is currently the third-largest crypto market in the Middle East after Turkey and Lebanon.

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