Dubai Approves Crypto Trading to Push for Digital Currencies’ Adoption

The United Arab Emirates financial regulators have allowed crypto trading in an economic-free zone in Dubai. The Dubai World Trade Centre Authority (DWTCA) signed an agreement with UAE’s SCA to support the regulation and trading of cryptocurrencies. The deal advances the UAE’s commitment to becoming a crypto-friendly global hub.

Allowing Crypto Trading in Dubai

The latest effort creates a structure that will allow the DWTCA to provide the appropriate approvals. Also, they will get to offer licenses for financial activity involving cryptocurrency. The SCA will also oversee significant crypto-related activities. They include issuance, listing, trading, and licensing as part of the agreement.

SCA’s acting CEO, Maryam Al Suwaidi, signed the agreement with two others. The two are DWTCA director-general, Helal Saeed Al Marri, and a marketing director.

According to Al Suwaidi, the new project is per the DWTCA’s aim. It wants to develop its free zone services. At the same time, it hopes to support new technologies such as non-fungible tokens. As Dubai pursues innovation and a digital-led economy, the DWTCA is eager to assist crypto-related enterprises.

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So far, the DWTCA and SCA have not given an official response to the announcement.

Growing Appetite Towards Crypto Adoption

The UAE’s relationship with cryptocurrencies may seem a little confusing from the outside. In 2017, its central bank prohibited the use of virtual currencies. However, they later declared that this did not include Bitcoin. The central bank governor warned against crypto use in 2018. However, the UAE, especially Dubai and Abu Dhabi, has become a hub for blockchain.

About two months ago, in a survey, half of every 10 UAE citizens stated that they plan on using crypto in the next year. About 63% admitted that this year had made them more open to the idea.

Adam Back, CEO of Blockstream, commented on the agreement via his Twitter handle. Malta is a smart city and a free-trade zone co-developed by the Malta government and Dubai Investment Corp. The same investors came up with Media City, the Internet City in Dubai.

The UAE, particularly Dubai, is famous for its optimistic outlook toward cryptocurrency. Dubai makes it easier for regulatory agencies to advocate and encourage blockchain.

Similar Agreements Set the Ship Rolling

Before, authorities had entered a similar agreement to bring in more crypto adoption. Dubai Airport Free Zone got into a deal that would welcome crypto assets. When the company signed the contract, DAFZA allowed crypto trading. But, it was under specific regulations. The United Arab Emirates’ SCA was to oversee the crypto assets. It was also handling all necessary approvals and licensing for companies.

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The Dubai Financial Services Authority (DFSA) intends to regulate bitcoin this year. In March, the DFSA even requested public feedback on the new crypto rules. Dubai wants to balance regulatory monitoring. At the same time, it is working to stimulate innovation in the digital asset area. The UAE has recorded double the transactions in the last two years, with about $18.5 billion in 2020.