The capital emirate of the UAE Abu Dhabi intends to become a global cryptocurrency hub
A sandbox will be created in the emirate of Abu Dhabi, where cryptocurrency companies will be able to check projects for compliance with UAE legislation.
Shorafa Al Hammadi, Chairman of the Economic Development Department of the United Arab Emirates (UAE) of Abu Dhabi, said the Abu Dhabi government had previously set a deadline for the end of this year to “make transactions for cryptocurrency holders back to normal levels.”
Abu Dhabi already has two regulated cryptocurrency exchanges, Matrix Exchange and Midchains, and the DEX trading platform will open soon (not a decentralized exchange), Al Hammadi said. He stated that the entire Abu Dhabi ecosystem has come together and is working to make transactions easier for all participants in the cryptocurrency market. The task is not limited to attracting them to the region. It is equally important to enlist their support in developing a legal framework for regulating cryptocurrencies.
According to Al-Hammadi, it is important to find critical vulnerabilities in the global cryptocurrency ecosystem in order to eliminate them. Therefore, a strong and reliable regulatory framework needs to be created for cryptocurrency users. The head of the department believes that the intention of the Abu Dhabi authorities to make the emirate a hub for cryptocurrencies will be a step towards transforming the economy in order to reduce the emirate’s dependence on oil and gas exports.
As part of this effort, the emirate is focusing on financial technology, providing the private sector with a sandbox where it can test its products in a real environment to ensure they meet the UAE’s stringent anti-money laundering (AML) and other regulatory standards.
“The number one risk we are focusing on is AML. Equally important for us are: technical management and control systems, protection of clients’ money, risks of storage and exchange operations. So we needed to develop systems to monitor these risks. ”
Emmanuel Givanakis, CEO of the Abu Dhabi Financial Services Regulatory Authority, added that the emirate is already among the leaders in creating an enabling regulatory environment for the crypto industry. The foundation for regulating the industry was already laid in 2018.
There is a real competition between the emirates of the UAE to become the center of cryptocurrencies in the state and the world. Recently, it was reported that the Dubai World Trade Center will become a cryptocurrency regulation area as part of an initiative by the Dubai authorities to create an enabling environment for the cryptocurrency sector. In August, the CEO of the Bittrex Global exchange announced that the UAE and Dubai have become favorable jurisdictions for the cryptocurrency business. Local regulators are loyal to the industry and develop blockchain-related technologies. In June, the UAE launched the first Bitcoin ETFs with local regulatory approvals.