United Arab Emirates and Cryptocurrency

United Arab Emirates Cryptocurrency Laws

Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology

The United Arab Emirates is considered one of the most progressive crypto countries in the world. In fact, government-owned licensing firm KIKLABB in Mina Rashid, Dubai now accepts crypto payments, including Bitcoin (BTC), Ethereum (ETH), and Tether (USDT), on behalf of the Dubai Financial Services Authority (DFSA), to pay for various trade licenses and visas.[1] Moreover, in January 2021, the DFSA announced its plan to produce a comprehensive crypto-regulatory framework per its 2021/2022 Business Plan.[2]

In April 2018, the United Arab Emirates introduced the Emirates Blockchain Strategy 2021, through which the country is attempting to maximize blockchain technology to move fifty percent or more of its government transactions onto the blockchain platform by the end of 2021, while becoming the first blockchain-powered government.[3]

In 2020, the Central Bank of United Arab Emirates (CBUAE) and the Saudi Arabia Central Bank (SAMA) released a report on its year-long joint effort, named “Project Aber: Joint Digital Currency and Distributed Ledger Project,” which “explore[d] the viability of a single dual-issue digital currency as an instrument of domestic and cross-border settlement between the two countries.”[4] Project Aber results affirmed that it was feasible for central banks to create payment systems at the domestic and cross-border levels via the distributed ledger technology, much like the results of similar pilots conducted by other central banks.[5]

Dubai is also working to expand the use of cryptoassets throughout the country. For example, the Dubai Multi Commodities Centre (DMCC) opened a new Crypto Centre open to companies developing various crypto and blockchain technologies. More specifically, the DMCC houses companies offering, issuing, listing, and trading cryptoassets, as well as those developing blockchain-enabled trading platforms, with the great support of the national government.[6]

Because of the United Arab Emirates’ crypto-friendly policies, many new and well-established companies are choosing to move their headquarters to the United Arab Emirates, including, most recently, Ripple, a United States technology company. [7] In 2019, the Securities and Commodities Authority (SCA) sought feedback from the industry and the public on the text of its regulations concerning cryptoassets, encouraging even more crypto companies to the country.[8]

Is cryptocurrency legal in the United Arab Emirates?

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[1] https://coingeek.com/uae-govt-agency-kiklabb-now-accepts-digital-currency-payments/

[2] https://www.dfsa.ae/Your-Resources/Publications-Reports/Business-Plan; https://365343652932-web-server-storage.s3.eu-west-2.amazonaws.com/files/7416/1096/4358/DFSA_Business_Plan_21-22-hires_spread.pdf

[3] https://u.ae/en/about-the-uae/strategies-initiatives-and-awards/federal-governments-strategies-and-plans/emirates-blockchain-strategy-2021; https://www.forbes.com/sites/suparnadutt/2017/12/18/dubai-sets-sights-on-becoming-the-worlds-first-blockchain-powered-government/?sh=4cc3f426454b

[4] https://fintechnews.ae/6877/saudiarabia/saudi-and-uae-central-banks-release-report-on-joint-digital-currency-project-aber/

[5] https://fintechnews.ae/6877/saudiarabia/saudi-and-uae-central-banks-release-report-on-joint-digital-currency-project-aber/

[6] https://www.thenationalnews.com/business/technology/dubai-s-dmcc-opens-new-crypto-centre-to-tap-into-blockchain-s-potential-1.1228890

[7] http://wam.ae/en/details/1395302884268

[8] https://www.sca.gov.ae/en/media-center/news/15/10/2019/crypto-asset-draft-regulations.aspx