UAE To Issue a National Crypto License as a Step Toward Fintech

The United Arab Emirates (UAE) is poised to issue federal licenses for virtual asset service providers (VASPs) by the end of the first quarter of 2022.

The UAE is aiming to attract more business owners and business men. Specifically, the country’s Securities and Commodities Authority is in the final stage of the process that will eventually allow VASPs to be set up.

This process is at its final stages, as the official authority has revealed that some of the nation’s financial free zones have already issued permits. One example is the Dubai Multi Commodities Center (DMCC), which has licensed 22 permits already. Similarly, the Abu Dhabi Global Market has licensed 6 permits, according to some governmental records.

Despite UAE officials expressing positive sentiments, there is still a degree of caution. The UAE is strict to prevent any violations and financial crimes from happening. This is to maintain the business-friendly environment that the country has managed to cultivate. 

The UAE officials also said the government wants to build a regulated ecosystem for crypto mining, an industry that consumes high electricity and that leads to many negative impacts on greenhouse-gas emissions.

There is potential for renowned companies to help UAE compete against rival financial centers globally. These include Singapore and Hong Kong, which are leading centers in creating regulated ecosystems for crypto trading.

Some companies that have set up shop are frontrunner Binance, Dubai-based crypto exchange BitOasis, and San Francisco-based exchange Kraken.

The UAE is currently the third largest crypto market in the Middle East, following Lebanon and Turkey, with a $26 billion transaction volume, according to data from July 2020 to June 2021.