Opinion: Irina Heever, cryptographic lawyer.
The founders who treat the regulatory structure as the central part of the market entry strategy are those who develop in the United Arab Emirates. Unfortunately, many founders consider licensing as a reflection.
ZAA is not a place where you can cut the bends. However, this is a place where thoughtful, well -prepared founders are rewarded with speed, brightness and access to a highly supportive ecosystem.
Unlike the beliefs of some founders, regulatory authorities are not a problem – confusion, bad planning and lack of readiness are.
Landscape of licensing cryptocurrencies in the United Arab Emirates can be hard to understand, to the extent that even experienced capitalists for Venture, serial entrepreneurs and global law firms often misunderstand this regime.
Let’s introduce some brightness in this situation.
One country, two legal systems
ZAA is a federal country covering seven Emirates, operating within two separate legal systems.
The continent’s legal system, known as the “land” regime, covers the entire ZAA territory and covers over 45 free economic zones. These jurisdictions are subject to ZAA civil law and are subject to the ZAA court system.
Financial Free, Abu Dhabi Global Market (ADGM) and Dubai International Financial Center (DIFC) operate independently in accordance with English customary law. They also maintain their own regulatory bodies and court systems, separate from the continent’s judicial system.
Understanding this fork is crucial because the regulatory body regulating your cryptographic activities depends mainly on the legal framework in which you decide to act.
One country, five cryptocurrency regulatory bodies
Five separate bodies regulate crypto and related activities, each with their own jurisdiction, mandate and licensing.
On the continent’s side, three relevant regulatory authorities are:
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Central Bank ZEA (CBUAE): regulates activities related to AED Stablecoins denominated, payments and cryptographic monetary messages, and approves foreign stablecins.
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Securities and Goods Office (SCA): regulates cryptographic exchanges, brokers and offers of tokens that resemble securities or freight contracts.
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Dubai Virtual Assets Regulators Authority (VARA): regulates most virtual asset service providers (VAPS) operating in Dubai, excluding people in DIFC.
Related: Dubai Greenlights Ripple Ripple Rlusd Stablein regulator
There are two separate regulatory organs in free from financial zones:
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Financial Services Regulators Authority (FSRA): Financial Watchdog for ADGM, which was developed by one of the most advanced regulatory framework for digital assets in 2018.
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Dubai Financial Services Authority (DFSA): DIFC regulator, with a careful but evolving approach to cryptographic assets.
This unique frame can be both a blessing and a challenge. Choosing an improper regulator or a lack of understanding of the scope of each organ may cause a wasted time, omitted capabilities or, in some cases, a total licensing failure.
Select the appropriate regulator
Proper jurisdiction depends entirely on the specific business model. Here are some typical scenarios:
Start cryptographic exchange
Are you planning to become another binance? Get ready to move on a strict license path. Vara, SCA or ADGM are potential houses for you. Everyone has their own requirements and none are for people with feeble nerves.
Issue Stablecoin
If you are thinking about rivalry trapped in AED, welcome to the adult table. You will be dealing with the ZAA Central Bank.
Build a toxled RWA platform
Do you want to transform luxurious real estate, art or whiskey magazine into blockchain assets? The newly introduced VARA regime for tokens secured by assets is a must. And no, hitting the “utility token” on white paper will not cut it here.
Set up a cryptographic fund
Do you have capital to implement and a vision of support for the next cryptographic unicorn? Time to make friends with FSRA Adg. This is one of the most advanced digital resources frameworks, but do not make a mistake, they expect real compatibility chops.
Start the payment application
Do you want to make a lot of money? The central bank will watch you closely. Do not expect a slight touch approach when servicing customer funds.
I’m trying to do it all
NO. Founders often want to build the entire offer at one time, which can be a regulatory burnout. It is much better to start a narrow – get one license, create adhesion and then a scale.
More best practices
The founders who prioritize the regulatory structure as the basic element of their strategy on the market are those who are successful in the United Arab Emirates.
Success from the very beginning requires a thorough regulatory assessment, adaptation of the business model with proper jurisdiction and power, as well as cooperation with legal experts who really understand the local landscape.
In the United Arab Emirates, cutting horns are not tolerated. The founders who carefully plan and proactively engage with regulatory bodies are awarded with speed, brightness and access to a highly supportive ecosystem.
Opinion: Irina Heever, cryptographic lawyer.
This article is used for general information purposes and should not be and should not be treated as legal or investment advice. The views, thoughts and opinions expressed here are themselves and do not necessarily reflect or represent the views and opinions of Cointelegraph.
