Dubai has banned the use of anonymity-enhancing cryptocurrencies such as Zcash, Dash, and Monero. The jurisdiction has finally published its long-awaited crypto regulations, which set licensing and authorization requirements for virtual asset companies and issuers looking to operate in Dubai.
The extensive rules, published on 7th February, detail requirements for companies from cybersecurity norms to compliance and risk-management standards.
The Virtual Assets Regulatory Authority supervises crypto activities in Dubai (VARA), set up last year to oversee the sector as Dubai aims to attract crypto and blockchain companies. In addition to Dubai, regulators in other jurisdictions, such as Japan, have also taken steps to prohibit privacy-enhancing crypto, while the European Union is considering prohibiting tokens that hinder traceability.
According to Angela Ang, senior policy adviser at blockchain intelligence startup TRM Labs, any obfuscation of money flows creates a problem in identifying criminal activity.
As a result, authorities respond aggressively to these types of asset classes and processes. Dubai, the most populous emirate in the United Arab Emirates, aspires to be a regional fintech center.
Following the failure of many prominent digital asset exchange and lending platforms during the market meltdown that occurred a year ago, regulators from across the globe are now striving to establish crypto oversight.
Before it can be put into effect, the new framework that Dubai has established must first get final approval. This framework addresses the advertising and marketing standards that crypto businesses must fulfill.
Nevertheless, the regulatory body is very interested in developing a model framework for global economic sustainability within an environment that is innovation-centric, has no borders, is neutral toward technology, and is future-oriented.
