The compulsory licensing regime applies to all companies seeking to provide services in the country, unless they are already licensed in a financial free zone in the United Arab Emirates.
The United Arab Emirates’ federal securities regulator will begin accepting applications from companies looking to offer crypto services in the country, according to an announcement on Monday.
All virtual asset service providers in the country, except for those already licensed in the UAE’s financial free zones, must apply for approval from the Securities and Commodities Authority. The SCA approved the licensing regime on Monday following a decision by the UAE Council of Ministers last year to regulate the cryptocurrency industry. Earlier this year, the SCA assumed responsibility for regulating the industry.
Some of the seven emirates, including Dubai and Abu Dhabi, have already developed licensing frameworks for cryptocurrency companies, and the local industry has embraced Dubai’s recently announced regime.
In addition to SCA approval, companies looking to do business in the emirate of Dubai must also obtain a license from its Virtual Asset Regulatory Authority, the announcement said.
Companies seeking authorization must demonstrate "operational efficiency and flexibility" and meet certain operating standards.
The announcement stated that the virtual asset rulebook has been revised from 2022. Financial activities such as virtual asset brokerage and custody, as well as new categories of virtual asset service providers have been added to the legislation.
The regulation states: “A person who wishes to engage in virtual asset activities should have its headquarters in the state and conduct business under one of the legal forms approved by the local authorities in relation to business licensing.”