The United Arab Emirates (UAE) government financial regulatory body has stated that it would begin accepting license applications from businesses that want to offer virtual asset services inside the UAE. The UAE is a member of the Gulf Cooperation Council (GCC).
Companies that currently possess licenses from the nation’s economic free zones are exempt from the obligation of registering with the regulator because they have previously satisfied this criterion.
In a news statement, the securities and commodities authority (SCA) said that all virtual asset service providers (VASPs) operating inside the nation must submit an application and get a license from the regulator. The only exception to this need is for VASPs already permitted to work within the country’s financially free zones.
The cabinet of the UAE passed resolution 111 of 2022 on Dec. 11, 2022. This resolution controls virtual assets, which majorly entails blockchain, to provide an “attractive investment, economic and financial environment for global companies and institutions operating in the virtual assets sector.”
The SCA said that the resolution applies to all transactions relating to virtual assets for investment purposes, including those in the country’s non-financial free zones. The regulatory body did stipulate a few restrictions.
Following the cabinet decision passed on Feb. 1, the SCA formally announced that it would be responsible for regulating and monitoring the virtual assets industry.
Meanwhile, digital asset firms operating inside the Emirate of Dubai will still be required to comply with the requirements set out by the virtual asset services authority (VARA), Dubai’s financial regulator. Additionally, these businesses must apply for VARA and get their license.
Because virtual assets utilized for payment purposes are within the purview of the central bank, the provisions of this act do not apply to such purchases. They are also not applicable in areas designated as financial-free zones.