UAE Crypto Regulations in 2024

The UAE has turned into a key player in the cryptocurrency market, with $25 billion in completed transactions last year. The country's gradual regulation and adoption of blockchain technology have attracted major exchanges like Binance and Kraken. Local startups like BitOasis, are also making significant contributions to support government initiatives and global technology partnerships. UAE is turning into a major innovation and trading center for cryptocurrency attracting investors worldwide. This blog will dig into UAE crypto regulations.

M Abd'al Bari

Research Associate

A Progressive Regulatory Landscape

In many ways, the UAE’s crypto regulations have been successful. The crypto-friendly laws and

regulations were established by the UAE to boost and raise the bar for other Middle Eastern countries. The acceptance of cryptocurrency as a nation is indicated by the

investments of people living in UAE in bitcoin and according to Bitget, 72% of citizens

invested in the crypto market. The regulations for cryptocurrency are authorized by the Securities and Commodities Authority (SCA) and Central Bank(CBUAE).

The United Arab Emirates has comprehensive cryptocurrency laws along with Australia. Institutional money movements in the UAE are also attracting cryptocurrency companies such as Crypto.com, Coinbase, American Paxos, Nomura’s Laser Digital, and Circle, and the $28 billion US stablecoin operator has set up shop in the country.

The UAE’s crypto regulations have always been progressive and flexible. The significant impact

can be seen in the financial centers of Abu Dhabi and Dubai on regulatory framework.

Dubai:

In 2021, significant international trade was made possible by the efforts of Dubai

World Trade Centre Authority (DWTCA). The Dubai Virtual Assets Regulatory Authority (VARA) regulated and strengthened the regulations in 2022.

VARA has proposed a comprehensive “Virtual Assets and Related Activities Regulations 2023” that details everything from trading and market conduct rules to information governance and anti-money laundering laws. In the year 2023, VARA has granted licenses to 19 VASPs. Binance joined Dubai’s growing list of VASP-licensed businesses in April 2024.

Abu Dhabi:

The regulation of cryptocurrency in Abu Dhabi was since 2018 by Abu Dhabi Global

Market (ADGM). The licensing, KYC regulations, AML/CFT activities, and ongoing market monitoring responsibility were taken by the free zone.

The new opportunities were explored by Ras Al Khaimah and Sharjhan after seeing the

standards set by Dubai and Abu Dhabi for digital assets. Sharjah is investigating blockchain applications, and Ras Al Khaimah has emerged as a hub for blockchain businesses, particularly Web3-focused ones like RAK DAO.

Evolution of Crypto and Digital Asset Regulations

UAE crypto regulation is constantly updating to create a favorable environment for digital assets.

2018	The Central Bank of the UAE and the Abu Dhabi Financial Services Authority (FSRA) have devised a regulatory framework for initial coin offerings (ICOs) and cryptocurrency exchanges.
2020	The initiative to process all government documents using blockchain technology.
2021	The Dubai World Trade Center (DWTC) creates a regulatory framework for cryptocurrency trading and attracts large exchanges and startups.
2022	VARA was created by DFIC in Dubai to monitor virtual assets, improve market integrity, and protect investors. The Abu Dhabi Global Market announced changes to its AML rules and sanctions. The FATF travel rule changed the provisions on digital assets.
2023	The UAE Cabinet announced the first federal regulation of virtual assets in January. In February, Abu Dhabi launched Hub71, a $2 billion financing drive to assist Web3 startups. The UAE Central Bank issued AML/CFT guidelines for virtual asset-dealing financial institutions in May. In November 2023, the Distributed Ledger Technology (DLT) Policy was released by the ADGM. For DLTs and Decentralized Autonomous Organizations (DAOs) to operate and issue tokens, it offers a thorough structure.
2024	Using the mBridge infrastructure, the UAE successfully performed its first cross-border digital money transaction in January 2024. With a shared CBDC platform, mBridge, developed by the central banks of Thailand, China, Hong Kong, and the United Arab Emirates, seeks to revolutionize international payments. In March, the DIFC announced the implementation of the Digital Assets Law. The new securities law and changes to existing legislation are also intended to provide clarity for investors and help the region keep pace with technological developments. In April, the FATF removed the UAE from its gray list.

Also Read: How are Crypto Regulations Changing Around the World?

Future Expectations

The UAE crypto regulations have a very promising future. Community and industry leaders expect continued growth thanks to supportive regulation and innovative projects. The United Arab Emirates’ strategic vision and dedication to blockchain technology have made them a major player in the global cryptocurrency scene. We may expect more blockchain solutions, increasing institutional investment, and international collaboration in the future. The UAE is leading the cryptocurrency boom due to strong laws and a focus on technological innovation.