Sunday, September 25, 2022

UAE to Nurture Crypto Ecosystem Growth Through Customized Regulations

The United Arab Emirates (UAE) is currently putting documents in place to issue federal licenses to crypto or virtual asset service providers (VASPs) in a bid to ensure stir the growth of digital currencies in the country as reported by Bloomberg News. The Bloomberg report cited a government official who pleaded anonymity as the matter has not yet been made public.

The government body that will be regulating the proceedings of the issuance of the licenses to VASPs is the Securities and Commodities Authority (SCA) of the Emirates. They are currently in the last phase of amending the legislation that will allow virtual assets service providers to emerge with ease.

The world’s biggest crypto exchange by trading volume, Binance is one among many other VASPs that is contending for a big spot at doing business in the country. The nationwide licensing system that the Emirates is adopting to accommodate VASPs, will better position it to compete with nations like Hong Kong and Singapore who are already established in crypto-related activities.

According to the report, VASPs have already been issued permits in some of the financial free zones in the nation. Amongst the issued licenses came from the 22 issued by the Dubai Multi Commodities Centre has licensed, the 6 from the Abu Dhabi Global Market has, and the Dubai Silicon Oasis Authority which has issued at least one.

At the close of 2021, the UAE concluded a risk assessment on digital assets. The assessment involved 16 private-sector agencies and 14 public-sector agencies. It was gathered after the assessment that there are tendencies that virtual assets may be used for illicit financial propaganda. However, the government decided that it will rather result in regulating cryptocurrency than outrightly ban it.

Further in the report, it also was gathered from the anonymous source that consultations were made to the U.K, the U.S, Singapore as well as the Paris-based Financial Action Task Force (FATF).

Per the consultation, the UAE sought systems to be put in place to mitigate any threat that will arise in the future as a result of exploring the opportunities in the crypto space by the nation. This step clearly showcases how much UAE believes in the future of blockchain technology and its attendant innovations.

The Securities and Commodities Authority of the nation will act as an oversight and watchdog for all the trading in the digital space once operation commences.

Israel Love
Israel Love is a passionate writer that enjoys educating and inspiring people through his writing. This passion fuels the desire to simplify the complexities in the blockchain ecosystem, by providing viable information about the crypto space in such a way that makes it easy for anyone to understand. Israel love also has interests in Human Resource Management as he is a trained expert in HR.

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