Hot off the heels of China's plans to establish a central bank-backed digital currency, the United Arab Emirates (UAE) had drafted regulation governing the use of blockchain and cryptocurrency within its borders.
Demand for cryptocurrencies and digital assets in the UAE is set to accelerate rapidly in the near future, as the increase in crypto transaction numbers have catapulted the UAE into the list of top countries making digital currency transactions in 2019.
As global trading volumes for crypto assets continue to soar throughout the Middle-Eastern region, the UAE has become a powerhouse, boasting crypto transactions worth over $210 million. This dramatically leaves the US, UK, and of course Australia, deeply in its wake.
Below is a graph of interest in crypto in UAE throughout the course of 2019.
This has unsurprisingly left UAE legislators on a pursuit to put pen to paper a firm regulatory stance on crypto adoption, as the Securities and Commodities Authority (SCA), the governmental body that regulates the UAE's financial and commodities markets, have sought the opinion of financial industry partners in order to finalize the draft regulation. The Authority invited all parties including investors, brokers, financial analysts, researchers, media and other interested parties “to review the draft decision and express their views."
The draft Bill, published by the SCA is entitled, 'Blockchain & Cryptocurrency Regulation 2020', which focuses on protecting the interests of investors and ensuring Anti-Money Laundering measures, taxation, mining and reporting requirements are complied with.
Once the regulation is implemented, market participants will be able to request guidance from the Telecommunications Regulatory Authority (TRA) through its eServices system regarding issuance of crypto assets or gaining regulatory clarity.
The Regulation also pronounces the "Dubai Blockchain Strategy", which aims to make Dubai the "first blockchain powered government."
It is also important to note that in January this year, the UAE and Saudi Arabia signed an agreement to cooperate on developing a cross-border digital currency, which will be strictly targeted for banks at an experimental phase with the aim of better understanding the implications of Blockchain technology and facilitating cross-border payments.