After inking an exclusive MoU with Binance, which is said to be the world¡¯s biggest crypto exchange, in December 2021, UAE is set to take another big move towards its aim of becoming the crypto industry hub.
The United Arab Emirates is reportedly planning to issue a federal crypto license for virtual asset service providers by the end of the first quarter of 2022, as per Bloomberg report.
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The UAE Securities and Commodities Authority is said to be in the final stages of finalizing legislation that would allow digital asset firms to set bases in the country. This way, having a national crypto licensing legislation would help the UAE with its goal to become a leading crypto-friendly jurisdiction.
For framing its crypto license legislation, the regulators have reportedly considered the Paris-based Financial Action Task Force guidelines and ongoing crypto policies in the United States, United Kingdom and Singapore.
The new crypto license would reportedly take a hybrid approach wherein the chief regulatory body would handle regulations in consultation with the central bank, whereas the local financial institutions can develop their own native license guidelines.
Besides the crypto license, the UAE government is also planning to build and regulate the crypto mining industry. UAE regulators are said to be working towards formulating laws that would pave the way for crypto and blockchain adoption.?
And this recent crypto licensing and mining legislation move could take UAE one step closer to that goal.?
Even through the MoU with Binance, the government had declared the Dubai World Trade Centre (DWTC) as a comprehensive crypto zone and a regulator for cryptocurrencies.
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Earlier, the Dubai Multi Commodities Center, the largest free-trade zone in the UAE, had set up a regulatory framework for crypto firms in March 2021, and has already licensed 22 companies, as per Bloomberg.
Even Abu Dhabi¡¯s International Financial Center, a finance hub and free-trade zone, had?issued its first crypto exchange license, to Matrix, in May 2020.?
In November 2021, three exchanges headquartered at the center were fully operational while another three were in the process of launching, the finance hub¡¯s regulation chief had told The National.
And in December 2021, the government of Dubai had stated that it will create a favorable regulated zone for crypto service providers in the Dubai World Trade Center, which is a skyscraper in the city.?
While the legal framework for a crypto license is expected to be introduced by the end of the first quarter of 2022, the presence of numerous free zones with relaxed taxation and regulatory regimes are some steps that have been spearheading UAE¡¯s mission to become crypto hub.
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