At the beginning of this year, the Central Bank in the United Arab Emirates (UAE) issued the ‘Regulatory Framework for Stored Values and Electronic Payment Systems’ on January 1 which seemed to ban all virtual currencies. Nevertheless, the Bank’s Governor recently corrected this misconception, confirming that virtual currencies, including bitcoin, are not banned.
Previous statement, bringing worries over the cryptocurrency, was the following:
All Virtual Currencies (and any transactions thereof) are prohibited.
This statement caused many people to conclude that the Central Bank has banned all virtual currencies. However, Gulf News recently obtained clarification from the Central Bank confirming that virtual currencies were not banned. Mubarak Rashid Khamis Al Mansouri, Governor of the Central Bank, told to news providers:
These regulations do not cover “virtual currency” […] these regulations do not apply to bitcoin or other cryptocurrencies, currency exchanges, or underlying technology such as blockchain.
The Governor also revealed that virtual currencies are “under review by the Central Bank and new regulations will be issued as appropriate.” He emphasized that the Regulation Framework’s core objective is “to facilitate robust adoption of digital payments across the UAE”.
The Regulatory Framework is still unclear on what exactly is included.
Last November, the Dubai Supreme Legislation Committee hosted a workshop on ‘the present and future of legislative and legal frameworks of Bitcoin’. Held amid a “high-level attendance of local and federal government entities,” the purpose of the talk was to help bring the UAE up to speed on the challenges that bitcoin and other digital currencies present.
“The term ‘virtual currency’ is relatively new, not only in the UAE and the region but also globally. Therefore, there is an urgent need to spread awareness about ‘Bitcoin’”, said H.E. Ahmad bin Meshar Al Muhairi, Secretary General of The Supreme Legislation Committee in the Emirate of Dubai. H.E. He also noted that:
We look forward to support officials at government bodies nation-wide with detailed information about the optimal use of this virtual currency. This will acquaint them with the ways international law deals with ‘Bitcoin’, which is now officially recognised worldwide.
