The United Arab Emirates is preparing to issue federal licenses for virtual assets service providers by the end of this quarter in a bid to attract crypto companies to the country, Bloomberg reported last week, citing a government official. According to the government official, the Securities and Commodities Authority (SCA) is in the final stages of establishing a framework that will enable VASPs to establish operations within the country.
Taking inspiration from regulatory approaches adopted by the U.S., U.K., and Singapore, the UAE will adopt a hybrid model. Under this approach, the SCA and UAE central bank will oversee regulation, while regional financial centers will handle day-to-day procedures related to licensing.
Additionally, the government intends to foster a conducive environment for crypto mining, as outlined in the report.
Dubai, one of the seven constituent emirates, announced plans in December to create a regulated zone favorable for crypto service providers within the Dubai World Trade Center. Shortly after this announcement, Binance, the world’s largest crypto exchange, inked a cooperation agreement with the trade center.
Abu Dhabi’s International Financial Center, a prominent finance hub and free-trade zone, granted its first crypto exchange license to Matrix in May 2020. By November 2021, three exchanges based in the center were fully operational, with another three in the process of launching, as disclosed by the finance hub’s regulation chief to local news site The National.
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Furthermore, the Dubai Multi Commodities Center, the UAE’s largest free-trade zone, introduced a regulatory framework for crypto firms in March 2021. As reported by Bloomberg, the center has already issued licenses to 22 companies.
