The first Arab country to prepare for licensing cryptocurrency

[yota691]

The first Arab country to prepare for licensing cryptocurrency

• Time : 02/17/2022 23:23:36
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• Reading: 2,093 times

  

{International: Al Furat News} The United Arab Emirates is preparing to issue federal licenses to virtual asset service providers by the end of the first quarter of this year, in an attempt to attract some of the world's largest cryptocurrency companies, according to Bloomberg, citing a government official.

The official, who asked not to be named, said that the SCA is in the final stage of amending the legislation to allow virtual asset service providers to deal in a range of cryptocurrencies.

Binance Holdings, the world's largest cryptocurrency exchange by trading volume, is among the exchanges considering tapping the UAE market.

A nationwide licensing system for virtual asset firms could help the UAE better compete with rival financial centers such as Singapore and Hong Kong, which are also in the midst of creating fully regulated environments for cryptocurrency trading, according to Bloomberg.

Some financial free zones in the country have already issued licenses to virtual asset service providers, as the Dubai Multi Commodities Center has obtained several licenses, while the Abu Dhabi Global Market has six licenses, and the Dubai Silicon Oasis Authority has obtained at least one license, according to a government report. , Bloomberg said she saw it. 

But the Dubai International Financial Centre, which is the Middle East hub for most Wall Street banks, has none at the moment, according to the same agency.

In an effort to attract more business, the UAE completed a virtual asset risk assessment late last year, with the participation of 14 public sector agencies and 16 private sector players. 

While there is a "significant risk" that this license may encourage involvement in illicit financing schemes, the government has concluded that appropriate regulation, rather than a complete ban, can mitigate these threats, the report said.

The UAE official told Bloomberg that Abu Dhabi looked at the latest guidance issued by the Paris-based Financial Action Task Force, as well as strategies used in the US, UK and Singapore. He said that opening the door to the sector reflects how the UAE embraces technology.

The Gulf state is taking a hybrid approach to supervision, with the official saying that the Securities and Commodities Authority will deal with the regulations with input from the central bank, while local financial centers can set their own procedures.

In addition, the Emirati official said that the government also wants to build an ecosystem for cryptocurrency mining, an industry that is under scrutiny from environmentalists and lawmakers globally due to its high electricity consumption and the resulting impact on greenhouse gas emissions. He said the sector would be subject to regulation.

Dubai-based exchange BitOasis is the largest virtual asset service provider in the UAE, according to a government report, however competition will increase with the upcoming licensing.

The UAE is the third largest cryptocurrency market in the Middle East, after Turkey and Lebanon, with a transaction volume of about $26 billion, according to data compiled by Chainalysis, which tracks cryptocurrency trades from July 2020 to June 2021.

The data showed that while the crypto footprint in the region is relatively small in global terms, it has grown by nearly 1,500% over the previous year.

[MEP01]

$10T market cap...

It's a coming.

(not financial advice).