Dubai Looks To Become A Hub For The Crypto Industry As The UAE Prepares To Provide Federal Licenses

The United Arab Emirates (UAE) is attempting to capitalize on the cryptocurrency boom. As such, the nation is developing a licensing framework for digital asset service providers in order to legitimize the cryptocurrency economy and establish itself as a worldwide industrial hub.

UAE to provide federal licenses

Various government officials have stated that the UAE is preparing to provide federal licenses for digital asset service providers in order to attract some of the world&39s best crypto enterprises. The Securities and Commodities Authority (SCA) is therefore in the final stages of drafting a licensing system which could allow virtual asset service providers such as crypto exchanges to begin operations in the UAE.

Abu Dhabi reportedly reviewed the Financial Action Task Force&39s recent recommendations on overseeing cryptocurrencies, as well as the techniques used by the United Kingdom, the United States, and Singapore, in drafting the new laws. It eventually agreed on a hybrid structure in which the SCA along with the central bank will be in charge of regulation but regional financial centers would have control over daily licensing processes.

All eyes on the UAE

The UAE is the Middle East&39s third biggest crypto market, after only Turkey and Lebanon. It was also one of the world&39s most rapidly growing markets, with a massive 1,500% growth in activity from 2020 to 2021.

The planned federal crypto licensing framework would hence help the UAE compete with other financial hubs such as Singapore and Hong Kong, which are also preparing to develop fully regulated cryptocurrency-friendly environments. Aside from licensing, the UAE wishes to foster a business-friendly atmosphere for crypto miners while taking into account the industry&39s possible environmental consequences.

Binance, the world&39s biggest crypto exchange, is already seeking to expand its footprint in the Middle East. The exchange stated in December that it has reached a deal with the Dubai World Trade Centre Authority to fully identify the aim of advancing the establishment of a new industrial hub for global digital assets.

Additionally, the upcoming World Blockchain Summit shall take place from the 23rd to the 24th of March in Dubai and will feature leading crypto and blockchain projects, influencers and pioneers. Meanwhile, Crypto Expo Dubai will occur from the 16th to the 17th of March and will serve as the event where industry leaders and experts can network with one another and explore crypto-related business opportunities.