In the first quarter of 2018, the United Arab Emirates will begin issuing federal licenses for cryptocurrency service providers. A hybrid approach will be used for UAE crypto regulation. It is expected that the government will create a national crypto licensing system to bring big businesses to the region.
UAE prepares to regulate crypto sector nationwide
Bloomberg, reporting Thursday that the United Arab Emirates (UAE), is set to begin issuing federal licenses virtual asset service provider (VASPs), to the end of the quarter. This was a source claiming to be an official from the government.
The UAE’s Securities and Commodities Authority (SCA) is in the final stage of amending legislation to regulate VASPs. A nationwide system of crypto licensing is hoped to attract large companies to the region.
A risk assessment was done by the country on crypto assets in late 2017. This assessment was conducted by 16 public and 14 private sector agencies. It was concluded by the government that regulation rather than a ban can reduce risks associated with cryptocurrencies being used for illicit financial schemes.
The UAE official told the news outlet that the country’s crypto regulation takes into account the latest guidance from the Financial Action Task Force (FATF) as well as regulatory strategies used in the U.S., U.K., and Singapore.
It will be a mixed approach to regulation. With input from the central banking, the SCA will regulate crypto. Licenses can be issued by local financial centres. A UAE official stated that the government is also interested in regulating the crypto mining sector.
VASP licensing has been granted by some of the UAE’s financial free zones. Binance, in partnership with Dubai World Trade Centre Authority, signed a December agreement to set up a global cryptocurrency hub.
Do you have any thoughts about the UAE setting up a licensing system for crypto-related businesses? Leave your comments below.
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