The UAE Securities and Commodities Authority will be giving crypto service providers federal licenses in the first quarter of 2022.
With different regulatory frameworks floating around from country to country, the United Arab Emirates is seemingly looking to make the region as crypto-friendly as possible, especially with Binance stepping into Dubai.
Based on the report posted by Bloomberg, the Securities and Commodities Authority is putting the final touches on the legislative measures so virtual asset service providers (VASPs) are able to operate freely in the country.
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Likewise, regulators are looking to create a framework of crypto mining and lay out a set of rules to build mining farms in order to make use of the electricity surplus.
This will allow the UAE to bring in more crypto-focused businesses that require a less regulated environment.
Interestingly enough, the report states that the federal license will not limit VASPs from imposing their own regulatory measures.
More specifically, regular businesses will be able to create personalized rulesets in their own environment, while regulators will work alongside the central bank to lay down any required ground rules.
That's because there are multiple free-trade zones in the United Arab Emirates that have their own regulatory measures, regime, and tax laws. These zones are predominantly in places like Dubai and Abu Dhabi which was the first place to regulate cryptocurrencies.
This move will definitely help the Gulf’s expansion into the blockchain industry, especially with Binance expanding all across the region. In December of 2021, Binance partnered up with Dubai’s World Trade Center, and received a business license to operate within Bahrain.