United Arab Emirates strengthens digital asset regulations in line with global standards

The United Arab Emirates (UAE) is accelerating digital asset regulation in line with global standards set by countries such as Singapore, the US and the UK. The Financial Services Regulatory Authority (FSRA) officially updated Rules to include digital currencies in anti-money laundering.

FSRA’s regulatory overhaul

A key highlight of these new updates is the implementation of FATF’s Digital Asset Travel Rules. These rules require stricter monitoring and transparency for transactions involving cryptocurrencies. Companies dealing with digital currencies now have more stringent guidelines to follow, especially when it comes to anti-money laundering practices.

Initially, the country established these FATF travel regulations in 2016 to curb illegal activities. On the other hand, in 2021, it was changed to a company that handles virtual assets. And in 2023, cryptocurrency assets will become subject to scrutiny by FATF regulations.

Identify the need for time

According to Ali Jamal, CEO of Cryptos Consultancy, these regulatory changes seek clarity while ensuring strict compliance with regulations to combat financial crimes such as money laundering, terrorist financing, and proliferation financing. The update also officially recognizes digital assets as a legitimate form of payment and acknowledges their role in financial transactions.

The UAE’s progressive stance on cryptocurrency regulation was especially praised in a PricewaterhouseCoopers (PwC) report. The report highlights the UAE’s progress in adopting cryptocurrency regulations, including ongoing efforts to develop AML regulations, travel rules, and stablecoin laws. This proactive approach has made the UAE an attractive destination for companies in the cryptocurrency space, such as Ripple, that aim to expand their operations in the region.