The global cryptocurrency markets are currently expanding at a steady pace with many financial institutions around the world of the view that cryptocurrencies may in fact be a substitute for traditional financial systems.
The global cryptocurrency market size is likely to reach USD 1758.0 million by 2027, exhibiting a Compound Annual Growth Rate of 11.2% during the forecast period. The UAE is one of the friendliest regions to set up cryptocurrency trading agencies or for blockchain technology companies as since the beginning of 2021, many policies have been introduced in Dubai to boost investments from blockchain technology companies. In July 2021, the Central Bank of UAE also announced the launch of its first digital currency by 2026, with this announcement part of its “2023-2026 strategy” which aims to “position it among the world’s top 10 central banks”.
The regulation of cryptocurrencies in Dubai is carried out by the FRSA (Financial Services Regulatory Authority), SCA (Securities and Commodities Authority), and the DFSA (Dubai Financial Services Agency). In order to provide crypto services in Dubai, a license is needed, either from the SCA or FRSA (depending on the place of operation). The trading of coins is regulated by the SCA/FRSA, and licenses may be granted depending on the coin traded. However, for the majority of large coins (evaluated by market presence), a license is generally granted. As trading in cryptocurrencies is considered high-risk by the Central Bank in UAE, all parties involved in the transaction must show strict compliance to the Anti-Money Laundering and Counter-Terrorism Financing Laws of the UAE. Strict data protection and cyber security provisions also need to be administered by the organization, with strict IT policies to be complied with.
The cryptocurrency regulations at this time are still relatively new and many changes are to be expected in the future. We at D’ Andrea and Partners are continually monitoring these changes and have a team of experts that can advise you. Please reach out to us at info@dandreapartners.com if you have any questions.
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