The United Arab Emirates has hatched a plan to become a global crypto hub wherein the world’s largest crypto companies will be lured in to set up shop in the country. The Middle Eastern country is reportedly planning to issue licenses for cryptocurrency-related firms by the end of this quarter.
UAE Readies A National Licensing Regime For Digital Asset Firms
Citing an anonymous government official, Bloomberg reported Thursday that UAE is looking to issue federal crypto licenses to virtual asset service providers (VASP) in a bid to allow leading companies working in the crypto sector to operate in the country freely.
The UAE Securities and Commodities Authority (SCA) is presently in the final stages of creating legislation that would let digital asset firms set up business within the nation, the official revealed.
In creating this new framework, UAE regulators are said to have considered the approaches used by the United States, United Kingdom, and Singapore as well as the guidance from the Paris-based Financial Action Task Force. Eventually, they decided to take a hybrid approach for the licensing regime, where the SCA and the central bank would oversee regulation while the regional finance centers would be able to come up with their own day-to-day licensing guidelines.
UAE Wants To Become A Top Global Crypto Hub
The world’s largest cryptocurrency exchange by trading volume, Binance, is one of the firms eyeing a move into the UAE market. The company signed a deal with Dubai World Trade Centre Authority (DWTCA) in December to cooperate on creating an industry hub for crypto assets.
By allowing such companies to operate legally, the UAE could emerge as a respectable competitor to global fintech hubs such as Singapore and Hong Kong which are also poised to create a favorable regulated zone for the crypto world.
While the crypto licenses are expected to be officially launched by the end of Q1, the UAE has already issued licenses to a number of crypto service providers, allowing them to operate and pay taxes. According to Bloomberg, approximately 22 companies in Dubai have been licensed so far.
Besides the crypto licenses, the UAE government is also preparing to build a conducive environment for crypto miners while taking into consideration the sector’s potential ecological impact.