An oasis in the desert? – Wednesday, March 9, 2022, Mohammad Bin Rashid Al MaktoumPrime Minister and leader of the United Arab Emirates, announced a new law on virtual assets. Also, he mentioned the creation of a regulator of crypto-assets. At the same time, Binance would be in talks to get a license to operate in Dubai. As the UAE continues its push to become an oasis for digital assets in the Middle East, does this announcement bode well for the famous exchange?
A regulator and a new crypto law for Dubai
Al Maktoum declared to have enacted a law creating a legal framework for crypto in the emirate of Dubai. This law aims to protect investors and “designing well-justified international standards” for sector governance. In addition, the leader stated that a new authority would have enforcement powers in the Emirate’s Special Development Zones. The virtual asset regulator, or VARAwill run in these areas except Dubai International Financial Center.
“The approval of the Crypto-Assets Act and the establishment of the Dubai VARA is a vital step that establishes the position of the UAE in this sector. This step aims to help the sector grow and protect investors. »
Sheikh Mohammed bin Rashid Al Maktoum
According to Al Maktoum, this law obliges residents to register near VARA before initiating crypto activities. As a result, companies specializing in virtual assets must also establish their presence to Dubai. These activities include operating an exchange, performing cryptocurrency transfers, and other trading-related services.
The announcement does not indicate which cryptocurrencies will fall under the law. However, she mentions that VARA will classify the types of virtual assets in addition to defining rules and controls. Therefore, anyone who breaks the new law could be fined. Then, the Board of Directors of the Dubai World Trade Center will determine the course of action in the event of a violation.
As an emirate within the United Arab Emirates, Dubai largely has its own laws and regulations. Nevertheless, Dubai has the specificity to operate several ” free trade zones “ where people can incorporate companies and apply for business licenses. For example, the Dubai Financial Services Authority acts as the financial regulator for the Dubai International Financial Center. This authority has introduced its own framework regarding crypto.
>> Protect yourself from regulatory uncertainty with Kucoin’s yield solutions (affiliate link). <<
A law that coincides with Binance’s plans in the Emirates
Binance CEO, Changpeng “CZ” Zhao, welcomed the creation of the VARA. Indeed, this lover of Dubai affirms that the regulatory clarity for cryptocurrencies is very important. Recall that CZ, well known in the cryptosphere, bought an apartment in the city in October 2021.
The UAE government started being crypto-friendly years ago. The first regulations for the digital asset industry were established there in 2018. In the same year, the country implemented its Emirates Blockchain Strategy 2021. The latter consisted of using blockchain technology to win on several counts.
” [La blockchain] saves time, effort and resources, and enables individuals to complete most of their transactions in a timely manner that suits their lifestyle and work. »
Sheikh Mohammed bin Rashid Al Maktoum
According to Bloomberg, Binance is currently in talks to obtain a Licence to operate at Dubai. Indeed, the famous exchange wants to develop its presence there. Will this law benefit Binance? We will know soon. However, the desire to create a federal license for cryptos in the Emirates did not appear yesterday. It is therefore not impossible that the regulator and the new law are rather benevolent towards cryptocurrencies.
The time for regulation has come, and with it the time for uncertainty. It is ESSENTIAL to make your stablecoins work safely. Earn interest with your USDC on Kucoin Lending (affiliate link).