Cryptocurrency regulation coming soon in the United Arab Emirates?
Relations between the United Arab Emirates, more specifically Dubai, and cryptocurrencies have long been ambiguous. In fact it was difficult whether the Persian Gulf land was for or against their use. However, some evidence suggested that the authorities’ opinion on the matter was rather positive.
Today, the Emirates are making more of an effort Development of an activity around the blockchain in the country, official. The aim is to create a regulatory framework that will help companies in the digital asset sector to conduct business in the Emirates while complying with local legislation.
The first stage of this pre-regulation was Creation of a free trade zone in Dubai, called KIKLABB, where businesses in the area can accept cryptocurrencies as payment. The national authorities now want to extend this experiment to the whole country or almost to the whole country.
👉 For further reading – Dubai: A free trade zone accepts cryptocurrencies as a means of payment
A zone system to regulate cryptocurrencies in the United Arab Emirates?
The issue of zones in the Emirates goes beyond crypto assets and blockchain. As a matter of fact, free or “free” zones have their own jurisdictionduring Securities and Commodities Authority (SCA) and the Financial Services Regulatory Authority (FSRA), the country’s financial regulators, are given authority over the entire territory. KIKLABB is, among other things, a free zone.
Almost all of these areas are based in the Emirates of Dubai and Abu Dhabi and are under the authority of the SCA and FSRA respectively. However, free zones have those Power to take more favorable measures on certain legal and tax issues.
According to Kokila Alagh, founder and president of the law firm Karm Legal, the SCA Promoting a permissive legal framework for the cryptocurrency and blockchain sectors. In particular, the local financial regulator sees this as a major economic opportunity that could turn the country into a hub for activities related to Bitcoin (BTC) and others.
Until today, however only certain free zones have taken action related to the industry. As such, it can be difficult to navigate, especially for a foreign investor looking to establish themselves in the country.
There are many blockchain-related projects under development in the UAE
The SCA’s desire to legislate is timely. As a matter of fact, Blockchain-related projects are proliferating in the country. Two of these projects stand out and seem almost contradictory. The first is the development of a digital dirham, which is scheduled to be released by the country’s central bank in 2023.
The second project is that of Binance in partnership with a free zone in Dubai. In fact, the exchange platform Changpeng Zhao wishes Set up a hub for cryptocurrencies and the blockchain in the country’s most famous emirate.
The future therefore looks interesting in the United Arab Emirates, who want to play on all fronts. It goes without saying that Free Zones are significantly more digital asset-friendly than SCA. If the latter is finally conquered, the Gulf country will undoubtedly become one Eldorado for cryptocurrencies in the near future.
👉 Read – The Binance platform will launch a cryptocurrency hub in Dubai
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