The outgoing secretary-general of the Financial Stability Board (FSB) stated that the body plans to roll out crypto regulations in 2023.

UAE Begins New Licensing for VASPs

  • The UAE has seen a boom in digital assets over the last few months.

The United Arab Emirates (UAE) is fast becoming a hub for digital assets, and regulators in the country are taking steps to advance this growth. The UAE’s financial regulatory body has stated that it will begin accepting license applications from businesses seeking to offer virtual asset services in the region.

The Securities and Commodities Authority (SCA) requires all virtual asset service providers (VASPs) operating in the UAE to submit an application and get a license from the regulator. This is however with the exception of those authorized in the nation’s financial free zones.

However, Dubai-based digital asset companies will be required to comply with the region’s financial regulator, the Virtual Asset Services Authority (VARA). These businesses must also submit an application to VARA and get a license.

The SCA formally declared on February 1 that it is taking on the tasks of regulating and overseeing the virtual asset industry. The goal of the decision, according to the SCA, is to “ensure the protection of investors’ funds in virtual assets from illegal practices.”

The SCA further stated that any transactions involving virtual assets for investment purposes, including those taking place in the nation’s non-financial free zones, are covered by the resolution. The regulator did, however, set some limitations. It said about the limitations:

Its provisions do not apply to virtual assets that are used for payment purposes, as they are subject to the jurisdiction of the Central Bank. They also do not apply to financial free zones.

The UAE’s strong strategy for regulating virtual assets is a reflection of its dedication to ensuring a safe and progressive financial ecosystem. Authorities in the country are keen on ensuring that digital asset providers stay diligent in their compliance efforts to avoid legal consequences and maintain their competitive edge in this fast-moving market.

Lawrence Woriji
Lawrence Woriji Verified Author

I have covered some exciting stories in my career as a journalist and find blockchain-related stories very intriguing. I believe Web3 will change the world and want everyone to be a part of it.

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