The United Arab Emirates is set to start issuing licenses to virtual assets service providers (VASPs) to attract crypto companies into the country, a government official has confirmed for Bloomberg.
The source has further stated that the Securities and Commodities Authority (SCA) is at the final stage of approving the new legislation and the whole licensing process should be well on the way before the end of Q1 2022.
Should everything go according to the plan, the country could more than likely welcome the cryptocurrency giant Binance Holdings Ltd. This would give Dubai the edge to compete with financial hubs like Singapore and Hong Kong that are already in the process of forming properly regulated crypto environments.
The UAE has been guided by the Financial Action Task Force and has taken inspiration from the US and UK approaches to licensing crypto. The country is also implementing a hybrid approach to oversight, with SCA handling registrations and the local centers establishing their own procedures.
The country also aims to build a crypto mining eco-system in Dubai, going hand in hand with the city’s boom over the past few decades. As the city already represents an attractive environment for financial operations, progress in digital assets seems like the right next step.
The crypto approach of the Emirates goes in line with how quickly the country has been able to adapt and become a financial and technological giant in recent years. We would not be surprised to see it as one of the industry leaders in the next few years. However, only time will tell.