The United Arab Emirates is planning to license virtual asset service providers by the close of the first quarter, a move expected to lure the global players.
A government official says that the country’s Securities and Commodities Authority is finalizing a policy to allow VASPs to operate formally.
A report by the authorities shows that Dubai Multi Commodities Center has licensed 22 VASPs, Abu Dhabi Global Market has licensed six, and Dubai Silicon Oasis Authority has licensed one.
The Federal license is expected to strategically position UAE to compete against financial hubs like Hong Kong and Singapore, which are warming up to the sector.
The Emirati authorities are also planning to set up a hub for cryptocurrency mining that would be regulated, despite the global concerns around energy efficiency.
The UAE conducted a risk assessment on virtual assets last year, where it concluded that whereas the sector was highly risky, proper regulations could address the concerns.
The country is currently the third-largest cryptocurrency market in the Middle East, with an estimated $26 billion in transaction volumes behind Turkey and Lebanon. Its cryptocurrency market has grown 1500% year-over-year.