In the coming future, Crypto will have a decisive role to play in country’s foreign trade, UAE’s foreign trade minister predicted.
When it came to cryptocurrencies and crypto companies, the minister emphasized the importance of global governance. According to Al-Zeyoudi, as the UAE develops its crypto regulatory framework, the focus will be on making the Gulf country crypto-friendly with adequate safeguards.
Al-Zeyoudi suggested that the UAE should work on its crypto regulatory framework. Only last week, the UAE Cabinet issued new regulations requiring entities engaging in crypto activities to obtain a license and approval from the Virtual Asset Regulatory Authority (VARA). If companies failed to do so, they would face fines of up to AED 10 million ($2.7 million) under the new law.
Omar Sultan Al-Olama, the minister of state for artificial intelligence and the digital economy, also spoke on a crypto-focused panel at the WEF on 19 January. Al-Olama said that while the FTX debacle was a major concern, the presence of crypto companies in the UAE was unquestionably a good thing.
The minister also defended the UAE against claims that its cities, such as Dubai, served as hotspots for disgraced crypto figures to flee, claiming that bad actors were to blame, as they don’t have a nationality and don’t have a destination. He did emphasize, however, that governments must work together to prevent bad actors from fleeing abroad.
Regulatory framework in UAE
In a bid to become a pioneer in blockchain technology, the UAE has launched the UAE Blockchain Strategy 2021, pursuant to which 50% of government transactions will be conducted using blockchain technology by 2021. To solidify its vision, regulations on the use of crypto assets, including cryptocurrencies, have recently been issued.
The Financial Services Regulatory Authority (FSRA) – which is the financial regulator of the Abu Dhabi Global Markets (ADGM), a free zone in Abu Dhabi – has become the first regulator in the UAE to issue comprehensive guidance and regulations on carrying out activities relating to cryptocurrencies. The FSRA issued supplementary guidance on the regulation of Initial Coin/Token Offerings and Virtual Currencies (under its Financial Services and Market Regulations), under which it commented on initial coin offerings (ICOs), whereby cryptocurrencies are offered for sale to the general public.
In order to jointly create the necessary governance and regulatory framework, “we started luring some of the corporations to the country.”Al-remarks Zeyoudi’s follow the UAE Cabinet’s introduction of new regulations just one week ago, which essentially require organisations engaging in cryptocurrency activities to obtain a licence and approval from the Virtual Asset Regulatory Authority (VARA).
Companies who don’t comply with the new regulation risk fines of up to $2.7 million. The action supplements the “Guiding Principles” for regulatory and oversight of digital assets that were released in September by the financial watchdog of the free economic zone in Abu Dhabi’s Global Market.
The principles set forth a welcoming posture toward cryptocurrencies while also promising to follow international guidelines for fighting money laundering and terrorist funding and supporting financial penalties.