UAE Central Bank stands closer to concluding on virtual currency review

In an article published in the National sources stated, that the Central Bank of the UAE is getting closer to finishing the review of virtual currencies. Such study may lead to new regulations on the usage of bitcoin, and other digital currencies.  

The lack of regulations around digital currencies has been an advantage for criminals and money launderers, which pushed this review towards investigating the means through which other governments responded to the challenge of digital currencies.

Bitcoin is legal in the UAE despite the fact that, on January 1, the Central Bank issued the ‘Regulatory Framework for Stored Values and Electronic Payment Systems’, which appeared to ban all virtual currencies. However, the Bank’s Governor rectified the misconception by confirming that virtual currencies such as bitcoin are not banned.

Even though bitcoin and other cryptocurrencies have been experiencing growth within the markets, they are starting to face stricter regulations and are banned in certain countries.

In fact, China outlawed Initial Coin Offerings last week, and plans to ban trading of bitcoin and other virtual currencies on domestic exchanges, negatively impacting the $150 billion cryptocurrency market.

However, the UAE market is witnessing the emergence of bitcoin in daily life usage highlighting the need for clearer regulations, whereby British Baroness Michelle Mone and Doug Barrowman, chairman of the Knox Group launched, last week, the Aston Plaza and Residences, a £250 million development spanning over 2.4 million square foot in Dubai. This project would be the first highly valued development to enable the use of the cryptocurrency.

This led to an initiative, whereby a number of landlords whose properties are managed by the Dubai real estate broker Fam Properties, would accept rental payments in bitcoin for a limited number of apartments at City Walk.