Crypto landscape in the UAE
Even when Bitcoin price moves down 10,000 USD in a matter of a few days, optimists still say that this is only volatility (and they might be right). They add that volatility is healthy for the market (again, this is right in some circumstances). Cryptocurrencies are still widely talked about, and in the Arab world, and the UAE in particular, people with savings might see them as good instruments to generate positive returns. Before people can purchase and trade Bitcoins, they need to understand the legal framework governing those cryptocurrencies in the UAE, and the crypto landscape in general. Generally speaking, the UAE is among the most open countries in this regard.
https://pixabay.com/photos/burj-khalifa-emirates-dubai-uae-2212978/
Cryptocurrencies are proliferating in the middle east
People interested in buying Bitcoin or other cryptocurrencies in the UAE can find several There are several exchanges to choose from. Some of those exchanges are located outside of the UAE elsewhere in the Middle East, whereas others are within the country and are allowed to operate and cater to customers in various other countries.
While one option is to purchase cryptocurrencies, the other is to trade them indirectly. If traders want to take advantage of price movement and trade cryptocurrencies instead of purchasing them from exchanges that often charge exaggerated fees, they can deal with various trading platforms that offer CFDs on many popular cryptocurrencies.
Cryptocurrency regulation in the UAE
Several authorities in the UAE have already started their regulatory machines. The Financial Services Regulatory Authority of Abu Dhabi Global Market) (FSRA-ADGM) took the initiative first and issued guidelines and regulations in relation to activities of buying and selling Cryptocurrency. Initial Coin Offerings (ICO) were the main object of those regulations. However, it was generally acceptable for people to purchase and sell cryptocurrency, despite the fact that FSRA-ADGM will study each commodity individually. The authority’s aim is to improve integrity and transparency of the financial system, restrict money-laundering activities and combat financial terrorism.
Quickly, DMCC (Dubai Multi Commodity Authority) followed suit. The authority allowed investors to establish a cryptocurrency trading company. Those companies are allowed to have their own offline wallets (aka. cold storage cellars). However, they are not allowed to trade on behalf of other people.
Blockchain strategy 2021
The UAE government has realized, ahead of many other governments, that the global financial system is undergoing a huge change, and that it needs to change its old ways. It has issued a directive to all government exchanges to start transitioning to blockchain infrastructure in 2021, under its Blockchain Strategy 2021. It also provided rules and regulations to offer clarity on the guidelines that those exchanges can follow. The government has recognized “cryptographic forms of money” in its framework, meaning that it accepts them as such. Dubai Future Foundation also established the Global Blockchain council.
Central bank needs to keep pace
Despite all of those initiatives, the central bank still needs to weigh in with more clarity about the path forward. In 2017, it issued a restriction regarding “virtual currencies”. The bank clarified later that the restrictions do not apply to cryptocurrencies.
All of this is good progress, but the UAE is yet to issue legalized regulations regarding the handling of cryptocurrencies in court cases, and whether there can be a claim on them in cases of damages or other situations.
Conclusion
The UAE has been a pioneer in regulating cryptocurrencies, as well as pushing forward innovation in blockchain. Buying and trading cryptocurrencies is allowed in the country. The government still needs to go further when it comes to legalized regulations, but it is already ahead of many other states in this domain. Now is not the time to be complacent.
We accept Guest Posts 
|
|
New
Review
Abu Dhabi International Airport - 41°F
