Crypto In UAE

The global cryptocurrency market is booming despite a clunky start to 2022, and it’s expected to integrate closely with – if not fully replace – traditional finance as we know it. 

And the United Arab Emirates – is emerging as one of the primary hubs for the crypto sphere, with its progressive legislation and regulatory framework supporting the development, evolution, and modernization of the industry. 

Legal status of crypto in UAE

No existing prohibitions on crypto are enforced there. While the Central Bank of the UAE is yet to license digital assets or approve of their use as legal tender, residents are free to own, sell and buy them.

Furthermore, several crypto exchanges are approved by the authorities to conduct operations within the financial free areas scattered across the country. Dubai Multi Commodities Center (DMCC) head Ahmed Sultan Bin Sulayem announced that the UAE will eventually become home to over a thousand crypto firms by year-end.

As for crypto taxes, the UAE has a quite friendly position here. It imposes no personal income or capital gains taxes on trading activities, nor does it impose reporting requirements on personal crypto investments.

Crypto trading rules

You have to receive a license to trade cryptocurrencies within the UAE. Interested crypto traders within the federation’s borders need to obtain a license to engage in trading. Fortunately, more free-trade areas within the UAE are providing licenses across the country – and the trend isn’t slowing down anytime soon.

How to get a crypto license?

Generally speaking, the UAE proceeds a standardized process for issuing crypto trading licenses that are basically similar in style and substance across the country. Here’s how it works:

1. Obtain a registration form of the free zone authority.
2. Fill it out and submit it with your firm’s registration and other related documents (such as valid identification, photographs, and shareholder details).
3. Find an adequate location for your enterprise and draft a rental agreement.
4. Pay the requisite licensing fees for crypto trading and the office rent.

Once done, and everything is found to be in order with your docs, you’ll receive your license within 7 days. Interested parties can freely open a bank account and apply for residency within the UAE.

Crypto use cases in UAE

Cryptocurrency adoption is rising in the UAE across all verticals, such as tourism, food, beverage, government agencies, and transportation, thanks to its forward-looking policies. Here are just a few examples:

Tourism

LucidPay, a key player in the tourism industry in the UAE, uses a blockchain protocol to help improve guests’ experiences and offer a wider scope of payment processing options. Recently, the company announced plans to build a stablecoin for the tourism and hospitality sector in the UAE on the Tezos blockchain.

Restaurants

At least a dozen restaurants in Dubai now accept cryptocurrency payment options, such as local favorites like Antika, B018, Bhukkad Café, and Doge Burger, just to name a few.

Hospitals

Dubai-based international healthcare conglomerate Thumbay Group announced plans to set up the first hospital in the metaverse, opening up a fully-virtual full-service hospital with a host of digital facilities across disciplines with cryptocurrency payments enabled. 

Airlines

Emirates COO Adel Ahmed Al-Redha announced plans to accept BTC and integrate NFT collectibles for trading on the flagship carrier’s online platforms.

Education

Citizens School is launching this September 2022 in Dubai, offers parents the option to pay in BTC and ETH, providing them with a greater range of flexible payment alternatives.

Government agencies

KIKLABB, a leading government licensing institution in the UAE, began accepting Bitcoin, Ether, and Tether payments, becoming the 1st UAE government-owned and controlled entity to do so.

Future of crypto in the Arab Emirates

The Central Bank of the UAE is launching its own cryptocurrency by 2026, positioning itself amid the world’s leading central banks in doing so. 

Moreover, the Dubai World Trade Centre Authority and the UAE Securities and Commodities Authority formulated plans to make the former a crypto-friendly area and future regulatory body for cryptocurrencies. This move is expected to attract scores of forward-looking investors to Dubai to build and develop the state's foundations as a leading cryptocurrency hub in the coming years.

As the world makes the shift to digital solutions to cope with rapidly-advancing developments, the United Arab Emirates, specifically Dubai, has positioned itself at the forefront of digital transformation not just in the Middle East, but also globally. This is largely due to the country’s sound compliance and regulatory framework governing digital currencies, in stark contrast to the more conservative approaches its Western counterparts are taking. 

With both private and public sectors in the oil-rich state adopting cryptocurrencies as a major part of their expansion strategy, the future of crypto in the UAE looks so bright, you literally gotta wear shades.

Also, if you are interested in how other countries like Australia, Nigeria, Mexico, India, Russia and USA are progressing with cryptocurrency adoption, check out SimpleSwap Blog posts!