Reports said that the United Arab Emirates (UAE) has planned to issue a federal crypto license for virtual asset service providers by the end of the first quarter.
It has been reported that the UAE Securities and Commodities Authority is reportedly in the final stages of finalizing legislation that would allow digital asset firms to set base in the country. A national crypto licensing legislation would help the UAE with its goal to become a leading crypto-friendly jurisdiction.
However, the regulators reportedly considered the Paris-based Financial Action Task Force guidelines and ongoing crypto policies in the United States, United Kingdom, and Singapore for framing its crypto license legislation.
The report said that the new crypto license would reportedly take a hybrid approach where the chief regulatory body would handle regulations in consultation with the central bank, while local financial institutions can develop their own native license guidelines. Apart from the crypto license, the UAE government is also planning on building and regulating the crypto mining industry.
As reported earlier, UAE regulators have been working toward formulating laws that would pave way for crypto and blockchain adoption. The newly reported crypto licensing and mining legislation could be one step closer to that. Earlier in December 2021, the government declared the Dubai World Trade Centre (DWTC) as a comprehensive zone and a regulator for cryptocurrencies.
Likewise, Binance, the world’s biggest crypto exchange, is eyeing the UAE market, as it signed an exclusive memorandum of understanding with the DWTC in December.
The partnership will see Binance help make DWTC a crypto hub in the region and also assist crypto exchanges and service providers to get access to UAE markets. While the legal framework for a crypto license is expected to be introduced by the end of the first quarter, the UAE has numerous free zones with relaxed taxation and regulatory regimes.
Thus, these free zones were among the first to introduce tokenized security regulations and digital asset regulations. Abu Dhabi Global Markets, which is regulated by the Financial Services Regulatory Authority, was the first to introduce digital asset regulations in 2018.