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The UAE Ready to Become the Middle East’s Crypto Oasis

While everyone is discussing crypto regulations in the U.S., Russia, or China, other countries are tip-toeing towards total crypto adoption. For instance, the United Arab Emirates (UAE) is preparing to issue federal licenses of virtual asset service providers (VASPs). The new legislation should come into effect by the end of Q1 2022. Above all, it should transform the country into a crypto oasis in the Middle East.

A Surprisingly Friendly Approach to Crypto

According to a Bloomberg report, the UAE’s Securities and Commodities Authority (SCA) is ready to pass new crypto regulations. And soon, local and international digital asset firms could operate legally within the country.

SCA peeked at the current regulatory stances in the U.S., the U.K., and Singapore, before finalizing the documents. Furthermore, the institution will oversee the emerging marketplace for digital assets in the UAE. Also, the Central Bank of the United Arab Emirates will help it in this endeavor. However, they will not interfere with the actual operations in the country’s most representative financial territories, Dubai and Abu Dhabi.

Lastly, the UAE’s government seeks to regulate crypto mining and boost crypto trade and activity.

The UAE’s Plans for a Crypto Oasis

The United Arab Emirates’ interest in digital assets may be surprising to those unfamiliar with the Middle East crypto dwellings. This part of the world is developing rapidly and away from the public eye. With such accelerated efforts towards crypto adoption, the region could soon be the friendliest towards digital assets worldwide.

For example, the UAE government emitted the first crypto regulation in 2018. Furthermore, it kick-started its “Emirates Blockchain Strategy 2021.” This program would enable blockchain technology as the underlying system for transactions and network-wide operations. According to its creators, the initiative would save up to $3 billion yearly in government paperwork spending and work hours.

Additionally, the UAE announced the development of a blockchain-based vehicle lifecycle management system. The program would also provide a blockchain-based b2b platform for local tourism and lodging operators.

Some may remember that one of the federation’s leading emirates, Dubai, has approved crypto trading to boost digital asset adoption. In September 2021, the Dubai World Trade Centre Authority (DWTCA) signed an agreement with SCA to regulate cryptocurrency trading.

Lastly, in November 2021, the country’s postal operator issued a series of NFT stamps. The first such collection in the Middle East celebrates the country’s 50th anniversary. Also, the UAE’s Central Bank announced plans to develop a national digital currency (CBDC).

Why Are the UAE Adopting Crypto?

The UAE consists of seven emirates – Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah, and Umm Al Quwain. Also, it includes several free zones with various forms of sovereignty and jurisdiction. Besides the language, culture, and customs, these regions share a remarkable economic surge that started in the 20th-century.

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The current economic success of the UAE comes mainly from expensive commodities like oil. However, the country’s leaders know that they cannot rely forever on its massive oil production and exports. Therefore, the emirates are investing heavily in new technologies, and the accelerated adoption of blockchain is far from surprising.

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