The government-owned Dubai World Trade Centre (DWTC) had announced on December 20, 2021, that the site was becoming a specialized zone and regulator for cryptocurrencies. The UAE authorities want to establish a favorable environment for the sector, while trying to address concerns about investor protection and the use of digital assets for criminal purposes. The country is reportedly about to take a major step in the development of cryptocurrencies, with a possible federal licensing of crypto businesses by the end of the first quarter of 2022.
A federal license: a giant step in the country’s hot sand
According to a February 17, 2022 Bloomberg article, the UAE Securities and Commodities Authority is reportedly finalizing legislation that would allow crypto companies to set up shop in the country. The legislation, which focuses on federal licensing of crypto players, would allow the UAE to become a leading industry-friendly jurisdiction.
The legislation would take into account the Financial Action Task Force (FATF) guidelines, as well as the cryptocurrency policies of the United States, the United Kingdom, and Singapore.
Regarding the organization set up for the implementation of the new regulatory framework, the Securities and Commodities Authority will with the help of the central bank, be in charge of regulation. Local financial centers, however, will be able to establish their own operational procedures for licensing.
While waiting for the federal license to be issued, some financial centers in the UAE have already granted licenses to digital asset service providers. The Dubai Multi Commodities Centre, for example, has issued 22 licenses, while the Abu Dhabi Global Market and the Dubai Silicon Oasis Authority have issued six and at least one respectively.
This is good news for Binance, which wants to expand its presence in the country. This federal license will allow the Arab Emirates to increase their competitiveness on the field of cryptocurrencies against financial centers like Singapore and Hong Kong.