According to a report by Bloomberg, the UAE in a bid to lure crypto companies into the country is planning to introduce federal licenses. These licenses would give the companies known as Virtual Asset Service Providers (VASP); the freedom to operate their business all over the country.
The government also wishes to create a cryptocurrency mining network through this process. By doing so, they hope to surpass other crypto centers in the world like Hong Kong and Singapore – according to what a government official told Bloomberg.
Legislation Still Ongoing
According to the same report, the Securities and Commodities Authority (SCA), is still in the process of finalizing the guidelines and legislations. This new law aims at helping these companies get a national outlook in the country and is not only limited to one region or constituent.
After considering the methods used by major crypto hubs around the world, the UAE is taking a different approach. The SCA alongside the Central bank will monitor the regulation and the issuing of licenses to qualified companies. They’ll also be responsible for determining the companies’ daily methods, techniques, and strategies in the licenses.
Even though the source wishes to stay anonymous; he also claims the government wants to create a conducive setting and atmosphere for mining cryptos.
Furthermore, the new plan will help companies who have already gotten licenses in regions like Dubai gain more ground and foothold in the country. One of the biggest crypto exchanges in the world – Binance, is among the list of companies with plans for a wider presence in the UAE.
In addition to the above-stated reasons, the regulation will also aid the government in monitoring criminal activities like; fraud, money laundering, etc.
Unlike some other countries, the UAE wishes to regulate the virtual space instead of just banning its activities
Dubai: Crypto pioneer in the UAE
Recall the Dubai government released a statement in December 2021; of its plan to make the Dubai World Trade Centre (DWTC) “a comprehensive zone and regulator for virtual assets”. This plan also includes crypto, digital assets, products, operators, and exchange platforms.
As a part of the Dubai government’s efforts to create new economic sectors; the announcement says that the Dubai World Trade Centre (DWTC) will become a comprehensive zone and regulator for virtual assets. These digital assets includes cryptos, NFTs, products, operators, and even exchanges.
Responding to the announcement, Binance immediately signed a Memorandum of Understanding (MoU) with the Dubai World Trade Centre Authority (DWTCA); to create a guideline to help accelerate the creation of an industrial hub for Digital Assets in the Emirate.