Bloomberg reported Thursday that the United Arab Emirates (UAE) is preparing to begin giving federal licenses to virtual asset service providers (VASPs) by the end of the first quarter, citing an anonymous government official.
The Securities and Commodities Authority (SCA) of the United Arab Emirates is close to finalizing laws to regulate VASPs. The government is hoping that a national crypto licensing system will entice large corporations to relocate to the region.
Also, Late this year, the country undertook a risk evaluation of crypto assets. Then, There were 14 public-sector agencies and 16 private-sector organizations participated in the evaluation. The government concludes that adequate regulation, rather than outright prohibition, can reduce the possibility of cryptocurrencies under use in illegal financial activities.
According to the news site, the UAE’s crypto law takes into account the Financial Action Task Force’s (FATF) newest recommendations as well as regulatory techniques employed in the United States, the United Kingdom, and Singapore.
A hybrid approach will be for the regulation. With advice from the central bank, the SCA will regulate the crypto business. So, Local financial centers might set up their own licensing procedures on a daily basis. The UAE government also wants to control the crypto mining industry, according to the official.
VASPs have already been granted licenses in certain of the UAE’s financial free zones. Binance and the Dubai World Trade Centre Authority reached an agreement in December to build a worldwide crypto hub.
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