What You Should Know About Crypto Trading In The UAE
The government of the UAE, especially in Dubai, welcomes new technologies and innovation, including Blockchain, and wants to introduce it in different areas. In spite of that, the UAE Central Bank and other financial institutions of the country have published guidelines on cryptocurrencies, including some warnings and restrictions.
The country launched a program aimed to process 50% of all federal government transactions on a blockchain platform within the next few years. The initiative should help to reduce printed documents and save many transportation kilometers. One example is Dubai. The city announced its intention to become the world’s first city to be managed through blockchain technology. As part of this initiative, it has entered into several strategic partnerships, including with companies such as IBM.
The situation with cryptocurrencies is different. At the moment, there’s a gap in specific legislation covering digital money. Most financial regulators in the UAE have issued warnings about the possible risks inherent in certain cryptocurrencies and initial coin offerings. For residents and visitors, trading and owning Bitcoins is mostly forbidden. All transactions in any digital currencies are forbidden as well.
The Central Bank of the UAE published a new set of rules aimed at companies offering account deposits and withdrawals, debit and credit card issuers, and P2P payment services. Virtual currencies themselves are defined as “any type of digital unit used as a medium of exchange, account creation or storage of value.” The new rules prohibit transactions in digital currencies.
Nevertheless, the Central Bank of the United Arab Emirates commented on the new regulations, explaining that the restrictions concerning the use of virtual currencies don’t apply to Bitcoin. The United Arab Emirates government is considering the formation of a regulatory framework that will focus on the convenient use of Bitcoin and cryptocurrency exchange platforms.