All businesses wishing to offer services in the country must obtain a license unless they already have one from one of the United Arab Emirates ‘(UAE) financial-free zones.
According to a Monday announcement, the federal securities regulator in the United Arab Emirates will begin taking applications from businesses wishing to offer cryptocurrency services in the country.
Except for businesses that currently hold a license in one of the financial-free zones in the United Arab Emirates, all virtual-asset service providers in the nation must submit an application for approval to the Securities and Commodities Authority. Following the decision by the UAE Council of Ministers to regulate the cryptocurrency industry last year, the licensing regime was approved by the SCA on Monday. Early this year, the SCA took control of the sector.
Some of the seven emirates, like Dubai and Abu Dhabi, already have licensing programs in place for cryptocurrency businesses, and the local market has accepted Dubai’s recently announced system.
The announcement states that businesses seeking to conduct business in the Emirate of Dubai must also apply for a license from the Virtual Assets Regulatory Authority.
In addition to meeting specific operational standards, businesses applying for authorization will need to show “operational efficiency and flexibility.”
In accordance with the announcement, changes will be made to the virtual asset rulebook starting in 2022. The law now includes new categories for virtual-asset service providers and financial operations like brokerage and custody of virtual assets.
According to the rule, “A person wishing to engage in virtual-asset activities shall have headquarters within the State to carry on his business, in accordance with one of the legal forms approved by the local authorities concerned with commercial licenses.”
As part of policies aimed at attracting investment from crypto platforms and other players in the digital asset business and becoming a regional centre for the industry, Dubai announced its latest regulatory structure for cryptocurrencies in February. The Securities and Commodities Authority was assigned with overseeing the digital asset sector in the same month.
The cryptocurrency exchange Crypto.com, which is based in Singapore, said on March 20 that it has been granted Dubai’s “Minimum Viable Product Preparatory License.” This license enables companies to do testing and development on their products and services for a period of up to six months.
Hex Trust, a Hong Kong-based cryptocurrency custodian, obtained the preparatory license in November and started operating the business in Dubai in February.
Although Binance acquired its preparatory license in September last year, Dubai officials asked for additional information from the global exchange regarding its management on April 5 before granting the operational permit.