The United Arab Emirates amps up its crypto game by giving a green flag to the issuance of federal licenses for virtual asset service providers, also called VASP’s. The Securities and Commodities Authority is in the ‘final stage’ of amending the legislation to allow the VASPs to set up in the Gulf country.
This was following the country’s aspirations to rise as a crypto hub in the Middle East by hosting one of the world’s biggest crypto companies by the end of the first quarter, as per the government officials’ statement to Bloomberg. However, in a world dominated by financial powerhouses like Hong Kong and Singapore, UAE would need a countrywide licensing system for visual-asset firms to keep up with its contemporaries in providing regulated environments for optimal crypto trading.
As per Bloomberg, a government report revealed that free economic zones have already issued permits for such VASP’s. For example, the Dubai Multi Commodities Centre has already licensed 22 VASP’s, while Abu Dhabi Global Market has six. In addition, the Dubai Silicon Oasis Authority also has licensed at least one.
When asked by Bloomberg, the official further informed, “The country is taking a hybrid approach to oversight. SCA will handle regulation with input from the central bank, while local financial centres can establish their day-to-day procedures around licensing.”
The UAE official further said that the latest move by the Abu Dhabi government had been taken under the guidance of the Paris-based Financial Action Task Force and the strategies employed in the U.S., the U.K. and Singapore.
This will boost the nation’s Fintech sector as UAE opens the door to new technology.
When it comes to the crypto mining industry, UAE seeks an optimal environment for the sector that has incessantly come under fire from environmentalists and lawmakers alike due to exorbitantly high greenhouse gas emissions, thus more carbon footprint and larger electricity bills.