Islam is one of the few religions that directly influence the laws and regulation of the financial market. The Koran prohibits selling what does not belong to you: Muslims cannot short futures and buy put options. What about cryptocurrencies?
Exchange service VIP | BTC talks about the preferences of Arab crypto investors, the specifics of doing business in the United Arab Emirates and the role of Dubai in the region.
Not by oil alone
There is a myth that the UAE economy is powered by oil, but this is not the case.
In 1970-1990, oil revenues actually accounted for half of the country’s budget. The sheikhs used the money to build factories, power plants, ports and office skyscrapers, and gradually adapted laws to suit the needs of entrepreneurs.
Since 1990, 40 free economic zones (FEZ) have been opened in the country, where companies from different countries could operate without transferring most of the shares to residents of the Emirates.
Around the same time, developed countries in the Middle East like Iran and Lebanon lost their economic stability. International trading companies and banks have moved their branches to the UAE, and Dubai and Abu Dhabi have become regional logistics and trade centers.
Thanks to this, by 2017, the share of oil revenues in the budget decreased to 20%. Most of the money began to bring construction, trade, tourism and financial services.
The country’s authorities are loyal to new technologies. In 2014, the first igot.com crypto exchange opened in Dubai, and in 2016, the Sheikh of Dubai took an initiative that included the development of regulation of the cryptocurrency market and financing of blockchain research, including the digital national currency – the drachma.
Cryptocurrency legislation in the UAE
The United Arab Emirates legalized cryptocurrencies in 2017. This was preceded by a lengthy development of the legal framework by the Securities and Commodities Authority (SCA) in collaboration with representatives of the crypto industry.
At this point, platforms for fundraising, custody storage services for cryptocurrencies, exchangers, exchanges and companies that tokenize assets are allowed in the UAE.
“Although the legal system of the United Arab Emirates is based on Sharia law, legislation is rapidly adapting to new conditions. For example, Sharia law prohibits loans at a fixed interest rate and currency speculation. At the same time, the laws of the UAE allow banks, exchangers and stock exchanges to operate, ”comments the VIP | BTC lawyer.
The UAE is a federal state consisting of seven states (emirates) with their own laws. This also applies to cryptocurrencies.
For example, in Abu Dhabi, it is allowed to trade a limited set of cryptocurrencies, and companies from the Dubai Free Zone can work with any coins and even accept payments in them.
94% of the UAE’s oil reserves are located in Abu Dhabi. There is almost no oil on the territory of Dubai; it is the financial, trade and tourist center of the region, which provides 24% of the country’s GDP.
Regulators in Dubai have developed a legal framework for cryptocurrency trading and securities tokenization, and are now working on laws for dealing with utility tokens and stablecoins.
Free economic zone business
Cryptocurrency companies can open a branch in the UAE in two ways:
- obtain an SCA license to work in one of the free economic zones of the emirates;
- obtain permission from the Abu Dhabi Global Market Regulator and the Dubai Financial Services Authority.
In any case, you need to prove that the company complies with Anti-Money Laundering (AML) laws, personal data protection and information protection measures.
“Large companies with B2B products usually go to Abu Dhabi, since registration and rent are more expensive there. Dubai is the preferred jurisdiction for companies that work with individuals, ”explains VIP | BTC.
One of the most popular areas for crypto business is Dubai Multi Commodities Center (DMCC). At the moment, it employs 18,000 companies in various fields.
Since June 2021, the office of the blockchain community DMCC Crypto Center has been operating in Dubai, whose members help foreigners to understand the UAE legislation, licensing and regulation of the crypto market. The opening ceremony was attended by the UAE Minister of Foreign Trade, the chairs of the Bitcoin Foundation, Tether and EOS Alliance.
The DMCC Crypto Center regularly hosts blockchain conferences: Crypto Expo Dubai, Future Blockchain Summit and World Blockchain Summit.
In late 2021, Binance, Huobi and several other cryptocurrency exchanges announced plans to move their headquarters to Dubai.
Crypto trading in Arabic
According to the VIP | BTC team, UAE residents are loyal to cryptocurrencies, although there are many tourists among the service’s clients.
Religion and mentality do not affect business in Dubai: the cryptocurrency market brings together cultures from all over the world.
The office is often approached by business owners related to real estate, electronics or luxury cars. Most of them buy cryptocurrency for long-term investments or diversification of savings, and only a small part for trading.
The most popular cryptocurrencies are Bitcoin and USDT. Recently, the Arabs are eagerly buying NFTs: they like to own something unique.
conclusions
The UAE has long ceased to be a gas station country and has become a regional leader in the production of building materials, food products and electricity.
Dubai has become a global financial center, where investments from all over the world flock. Loyal cryptocurrency legislation of the emirate attracts more and more players in the cryptocurrency market.
UAE residents know about cryptocurrencies and use them for long-term investments. In the opinion VIP | BTC, these factors make the region one of the most promising for the cryptocurrency business.
Subscribe to Cryplogger news on Telegram: Cryplogger Feed – the entire news feed, Cryplogger – the most important news, infographics and opinions.
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Islam is one of the few religions that directly influence the laws and regulation of the financial market. The Koran prohibits selling what does not belong to you: Muslims cannot short futures and buy put options. What about cryptocurrencies?
Exchange service VIP | BTC talks about the preferences of Arab crypto investors, the specifics of doing business in the United Arab Emirates and the role of Dubai in the region.
Not by oil alone
There is a myth that the UAE economy is powered by oil, but this is not the case.
In 1970-1990, oil revenues actually accounted for half of the country’s budget. The sheikhs used the money to build factories, power plants, ports and office skyscrapers, and gradually adapted laws to suit the needs of entrepreneurs.
Since 1990, 40 free economic zones (FEZ) have been opened in the country, where companies from different countries could operate without transferring most of the shares to residents of the Emirates.
Around the same time, developed countries in the Middle East like Iran and Lebanon lost their economic stability. International trading companies and banks have moved their branches to the UAE, and Dubai and Abu Dhabi have become regional logistics and trade centers.
Thanks to this, by 2017, the share of oil revenues in the budget decreased to 20%. Most of the money began to bring construction, trade, tourism and financial services.
The country’s authorities are loyal to new technologies. In 2014, the first igot.com crypto exchange opened in Dubai, and in 2016, the Sheikh of Dubai took an initiative that included the development of regulation of the cryptocurrency market and financing of blockchain research, including the digital national currency – the drachma.
Cryptocurrency legislation in the UAE
The United Arab Emirates legalized cryptocurrencies in 2017. This was preceded by a lengthy development of the legal framework by the Securities and Commodities Authority (SCA) in collaboration with representatives of the crypto industry.
At this point, platforms for fundraising, custody storage services for cryptocurrencies, exchangers, exchanges and companies that tokenize assets are allowed in the UAE.
“Although the legal system of the United Arab Emirates is based on Sharia law, legislation is rapidly adapting to new conditions. For example, Sharia law prohibits loans at a fixed interest rate and currency speculation. At the same time, the laws of the UAE allow banks, exchangers and stock exchanges to operate, ”comments the VIP | BTC lawyer.
The UAE is a federal state consisting of seven states (emirates) with their own laws. This also applies to cryptocurrencies.
For example, in Abu Dhabi, it is allowed to trade a limited set of cryptocurrencies, and companies from the Dubai Free Zone can work with any coins and even accept payments in them.
94% of the UAE’s oil reserves are located in Abu Dhabi. There is almost no oil on the territory of Dubai; it is the financial, trade and tourist center of the region, which provides 24% of the country’s GDP.
Regulators in Dubai have developed a legal framework for cryptocurrency trading and securities tokenization, and are now working on laws for dealing with utility tokens and stablecoins.
Free economic zone business
Cryptocurrency companies can open a branch in the UAE in two ways:
- obtain an SCA license to work in one of the free economic zones of the emirates;
- obtain permission from the Abu Dhabi Global Market Regulator and the Dubai Financial Services Authority.
In any case, you need to prove that the company complies with Anti-Money Laundering (AML) laws, personal data protection and information protection measures.
“Large companies with B2B products usually go to Abu Dhabi, since registration and rent are more expensive there. Dubai is the preferred jurisdiction for companies that work with individuals, ”explains VIP | BTC.
One of the most popular areas for crypto business is Dubai Multi Commodities Center (DMCC). At the moment, it employs 18,000 companies in various fields.
Since June 2021, the office of the blockchain community DMCC Crypto Center has been operating in Dubai, whose members help foreigners to understand the UAE legislation, licensing and regulation of the crypto market. The opening ceremony was attended by the UAE Minister of Foreign Trade, the chairs of the Bitcoin Foundation, Tether and EOS Alliance.
The DMCC Crypto Center regularly hosts blockchain conferences: Crypto Expo Dubai, Future Blockchain Summit and World Blockchain Summit.
In late 2021, Binance, Huobi and several other cryptocurrency exchanges announced plans to move their headquarters to Dubai.
Crypto trading in Arabic
According to the VIP | BTC team, UAE residents are loyal to cryptocurrencies, although there are many tourists among the service’s clients.
Religion and mentality do not affect business in Dubai: the cryptocurrency market brings together cultures from all over the world.
The office is often approached by business owners related to real estate, electronics or luxury cars. Most of them buy cryptocurrency for long-term investments or diversification of savings, and only a small part for trading.
The most popular cryptocurrencies are Bitcoin and USDT. Recently, the Arabs are eagerly buying NFTs: they like to own something unique.
conclusions
The UAE has long ceased to be a gas station country and has become a regional leader in the production of building materials, food products and electricity.
Dubai has become a global financial center, where investments from all over the world flock. Loyal cryptocurrency legislation of the emirate attracts more and more players in the cryptocurrency market.
UAE residents know about cryptocurrencies and use them for long-term investments. In the opinion VIP | BTC, these factors make the region one of the most promising for the cryptocurrency business.
Subscribe to Cryplogger news on Telegram: Cryplogger Feed – the entire news feed, Cryplogger – the most important news, infographics and opinions.
Found a mistake in the text? Select it and press CTRL + ENTER
