Using Cryptocurrency in the UAE
The UAE is one of the most promising jurisdictions for crypto business. The Emirates actively attracts companies operating in the cryptocurrency sector.
UAE: Federal Regulation
We will consider the specifics of regulation of the crypto industry at the federal level and at the level of the emirates of Dubai and Abu Dhabi.
At the federal level, there are laws regulating work with virtual assets in all emirates.
Laws
- The SCA Virtual Asset Regulation
- Stored Value Facilities Regulation
- Retail Payment Services and Card Schemes Regulation
Regulatory authorities
- Securities and Commodities Authority
- Central Bank of the UAE
They regulate:
- the use of cryptocurrencies, stablecoins, tokens linked to securities and commodities,
- requirements for ICO, placement, trading of cryptocurrency assets.
Dubai
In Dubai there is general regulation at the level of the Mainland and all Free Zones except DIFC.
Law
- Dubai Law No. 4 of 2022 Concerning Regulation of Virtual Assets
Regulatory Authority
- Dubai Virtual Assets Regulatory Authority (VARA)
General legislation in Dubai regulates:
- issuance of virtual assets and NFTs,
- licensing of asset providers and crypto platforms.
Without a VARA license, the law prohibits:
- provision of crypto platform management services,
- exchange of one cryptocurrency for another cryptocurrency,
- exchange of cryptocurrencies for national or foreign currency,
- storage, control of cryptocurrency, etc.
Dubai has a special financial free zone – Dubai International Financial Centre (DIFC), which is regulated by a separate government body – Dubai Financial Services Authority (DFSA).
Consultation Paper No. 143 came into force on 1 November 2022, which contains comprehensive regulation of crypto assets within the DIFC. In particular, a separate license will be required to conduct crypto business in the DIFC.
Abu Dhabi
"The legislation of this free zone made it one of the first places in the UAE where comprehensive regulation of virtual assets was introduced and licensing issues were resolved." Artur Faniev, commercial директор
Abu Dhabi has a free zone called Abu Dhabi Global Markets (ADGM). ADGM introduced cryptocurrency regulation back in 2018.
Laws
- The Financial Services and Markets Regulations
Manuals for them:
- Guidance on Regulation of Digital Securities Activities in ADGM
- Guidance on Regulation of Digital Security Offerings and Virtual Assets under the FSMR
- Guidance on Regulation of Virtual Asset Activities in ADGM
Regulatory Authority
Financial Services Regulatory Authority (FSRA)
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About Versus
Versus is a leading consulting group providing legal and accounting services in key foreign markets.
Over the years of working in the UAE and other MENA countries, we have acquired a deep knowledge of local legislation, which, combined with knowledge of international standards, allows us to offer solutions tailored to the unique needs of each client.
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