UAE prepares for crypto

What

The United Arab Emirates is set to issue federal licenses for virtual asset service providers

Why

As institutional adoption surges across the globe, Middle Eastern states like the UAE could look into amending their crypto policies

What next

Virtual asset service providers will be able to set up shop by the end of Q1 2022

The story

The United Arab Emirates is expected to start issuing federal licenses for virtual asset service providers (VASPs), according to an official who wished to remain anonymous. This comes after the Securities and Commodities Authority said they’re in the final stages of changing legislation that allow VASPs to operate as soon as the end of the first quarter.

A licensing system for virtual-asset firms could help bolster the UAE’s competitive edge in their financial sector, as rival nation states like Singapore and Hong Kong are actively creating policy around such assets.

The UAE wouldn’t be the first nation to issue licenses to VASPs. So far, Dubai Multi Commodities Centre has licensed 22, while Abu Dhabi Global Market has six and Dubai Silicon Oasis Authority has at least one.

Processes to bring more business to the UAE began last year, with the monarch country having completed a risk management assessment on virtual assets. The assessment focussed on 14 public-sector agencies and 16 private-sector actors.

The report of the assessment, as seen by Bloomberg, suggested that regulated use over an outright ban could help mitigate illicit threats.

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