Will new crypto regulatory law in Dubai encourage crypto adoption?

Highlights

• Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister of the United Arab Emirates, announced that the country will be setting up a new law on virtual assets and for a regulatory authority.
• Binance CEO Changpeng Zhao in a tweet welcomed the regulatory clarity adding that this new law in Dubai will be a futuristic move.

In recent times, Dubai has established itself as one of the crypto hubs in West Asia. The raging crypto interest has, in fact, made leading cryptocurrency exchange Binance consider Dubai as one of the global offices.

Although eventually, Binance chose Bahrain as its headquarters, Dubai is definitely favoured as an upcoming cryptocurrency hub. The United Arab Emirates itself is targeting to set up close to 1,000 crypto businesses by the end of this year. For this, the government has been taking aggressive steps by setting up free zones in both Dubai and Abu Dhabi that is aimed to encourage crypto entrepreneurs.

Taking a step further in the development of crypto businesses in the region, Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister of the United Arab Emirates said on 9 March that the country will be setting up a new law on virtual assets and for the establishment of a regulatory authority.

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Will New Crypto Regulatory Law In Dubai Encourage Crypto Adoption?

What would the legal framework entail?

Sheikh Rashid informed that the crypto legal framework is aimed to set up international standards. For this, a Dubai Virtual Asset Regulatory Authority has been set up that is expected to have the enforcement powers in the country.

Image Credit: Twitter @HHShkMohd (HHShiekh Mohammad)

He added that the law would ensure the growth of the crypto sector and also protect investors’ interests. The Dubai Virtual Asset Regulatory Authority has been assigned the tasks of managing crypto asset platforms and related services, while adhering to personal data rules.

Those who violate the laws could face hefty fines or even have their operations suspended.

Also read: Why is European Union's MiCA bill vote one to watch out for?

A new regulated era

Binance CEO Changpeng Zhao in a tweet welcomed the regulatory clarity adding that this new virtual asset law in Dubai is a futuristic move. Whether it will have an impact on free zones is still unknown, the move is dubbed to be a progressive move by the government. 

Image Credit: Twitter @cz_binance (CZ Binance)

The law is expected to clarify the way crypto businesses can operate and this could also encourage other exchanges – both domestic as well as foreign – to explore the options more openly in a regulated way. Besides, the favourable crypto environment could also encourage more crypto adoption in the country.

Though this can be a new era for cryptocurrencies, investors should understand that cryptos are a highly volatile asset category and one must do their research before getting into it. 

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