On January 1, 2017, the central bank of the United Arab Emirates posted a new framework covering virtual payments in the UAE. In step with the new Regulatory Framework For stored Values and digital payment systems, which is relevant to all digital payment offerings providers, all digital Currencies are prohibited.
Within the new framework, the definition for crypto currencies that the central bank has recognized is any kind of virtual unit used as a medium of exchange, a unit of account, or a type of stored value. So, bitcoin and different cryptocurrencies have been banned by the central bank of the United Arab Emirates.
On February 1, Mubarak Rashed Khamis Al Mansouri, governor of the central bank of theUnited Arab Emirates, stated:
“These regulations do not cover cryptocurrency, which is described as any kind of virtual unit used as a medium of exchange, a unit of account, or a form of stored value. In this context, these policies do not apply to bitcoin or different cryptocurrencies, currency exchanges, or underlying technology including blockchain technology.”
He told that cryptocurrencies are presently under review by the central bank of United Arab Emirates and new regulations will be issued as appropriate. Governor Al Mansouri noted that improvement of financial technologies would play a fundamental role in the destiny of the United Arab Emirates’ economic business, which is the motive why the brand new framework was added.
Even as the new framework for e-payments and the confusion surrounding bitcoin policies may sound worrying to some, the fact is that the United Arab Emirates goals to grow to be a main center for blockchain innovation by 2020 and intends to become the primary government to execute all of its transactions using the Blockchain technology.
To gain this aim, Dubai’s Crown Prince, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, released the Dubai blockchain strategy to enhance inefficiencies in governmental departments via removing paper transactions and decreasing the work hours involved in dealing with paper transactions. Moreover, the blockchain strategy also aims to facilitate organization incorporations for Emiratis, expats and foreign traders by developing an incorporation software based on blockchain technology.
As the United Arab Emirates aims to become a chief in blockchain, it might be very surprising if its regulators would then stunt innovation in this region by banning or limiting the usage of Bitcoin and different cryptocurrencies. Therefore, any future bitcoin regulations in the United Arab Emirates will probably favor blockchain startups and bitcoin as well.