UAE Prepares to Launch Nationwide Crypto Licensing System in Line With Global Standards
Bloomberg reported Thursday that the United Arab Emirates (UAE), citing an unnamed official, is about to issue federal licenses to virtual asset services providers (VASPs), by the end the first quarter.
The final stages of amending legislation in order to regulate VASPs are being completed by the UAE’s Securities and Commodities Authority. The government hopes that the country will be able to attract large companies with a national crypto licensing system.
Late last year, the country conducted a risk assessment for crypto assets. This assessment was conducted by 16 private-sector organizations and 14 public-sector agencies. The government found that regulation rather than a ban can reduce the risk of cryptocurrency being used in illegal finance schemes.
According to the UAE official, crypto regulation in the country takes into consideration the Financial Action Task Force’s (FATF) latest guidance, as well as the regulatory strategies that were used in the U.S.A, U.K. and Singapore.
It will be a mixed approach to regulation. With input from the central banking, the SCA will regulate crypto. Local financial centers may establish their own licensing procedures. According to the official from the UAE, the government wants to regulate crypto mining.
VASP licenses have been issued by some financial-free zones in the UAE. Binance and Dubai World Trade Centre Authority signed an agreement in December to create a global crypto hub.