The United Arab Emirates (UAE) recently announced the strengthening of its regulatory framework for cryptocurrencies.
A cooperation agreement has been signed between the Securities and Commodities Authority and Dubai’s Virtual Assets Regulatory Authority.
This partnership aims to establish consistent and robust regulation across the country.
This aims to consolidate, once again, the UAE’s position as one of the world’s leading hubs for digital finance.
Strong regulatory framework to attract crypto players to the UAE
The goal of this agreement is to create a harmonized regulatory environment for cryptocurrencies in the UAE, aligned with the government’s guiding principles.
The collaboration between the SCA and VARA ensures rigorous oversight of crypto activities. This cooperation attracts international companies to operate in this dynamic market.
The two government institutions will work together to grant licenses, supervise virtual asset service providers (VASPs), and apply sanctions in the event of non-compliance.
“Today marks a crucial milestone, demonstrating regulatory cohesion across the UAE, advancing our shared vision for a robust, secure and interoperable crypto ecosystem. The strength of our collaboration with federal partners like SCA, enables seamless and efficient portability of regulated services, enabling uncompromising market risk insurance in the UAE. This reflects our collective commitment to enabling Responsible Innovation, and adherence to the highest standards of cross-border compliance and investor protection.”
HE Helal Al Marri. Press release
Regulations to protect investors
SCA and VARA stress the importance of compliance with anti-money laundering (AML) and anti-terrorist financing (CFT) regulations.
This framework not only ensures the legitimacy of transactions, but also strengthens investor confidence in the local ecosystem.
The press release stresses that these measures are crucial to protect the market from abuse and encourage sustainable growth. Especially for the digital dirham.
Indeed, by introducing strict rules for stablecoins, particularly those backed by the dirham (AED), the UAE government aims to offer greater stability in the digital payments sector.
These regulations include restrictions on algorithmic stablecoins and privacy tokens.
With these measures, the UAE is positioning itself as a world leader in the crypto industry, ready to respond to global challenges.
This opens up new opportunities for international businesses and investors.
As the sector continues to evolve, constant regulatory oversight and adjustments will be essential to maintain this balance between innovation and security.
This strategy comes as no surprise. Indeed, the UAE is one of the 3 countries leading crypto adoption.
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