Dubai Blocks Crypto Projects
2023.02.10 09:48
Dubai Blocks Crypto Projects
By Tiffany Smith
Budrigannews.com – The much-anticipated guidelines for virtual asset service providers (VASPs) in Dubai, United Arab Emirates, which included a ban on privacy coins, were recently issued by the Virtual Asset Regulatory Authority (VARA).
The “Virtual Assets and Related Activities Regulations 2023,” which VARA mentioned as one of its rulebooks for VASPs, was released on February 7. VARA wrote in the document that:
“The Emirate prohibits the issuance of anonymity-enhanced cryptocurrencies and all VA Activity[ies] related to them.”
How market participants perceive the most recent cryptocurrency guidance in Dubai.
The Virtual Assets and Related Activities Regulations 2023 issued by Dubai’s VARA establish a comprehensive Virtual Asset (VA) Framework based on economic sustainability and cross-border financial security principles. pic.twitter.com/MdVPgSW5AT
As per Khaled Moharem, the leader of the blockchain-based installments environment WadzPay MENA, the news didn’t come as a shock on the grounds that different locales have made comparative signs. Moharem told that while additional time is expected to completely evaluate the ramifications of the new turn of events, their underlying appraisal shows that issuance will be restricted. He made sense of that:
Regardless of whether it is digital or physical, all forms of money must be traceable in some way. While the misconception that digital currencies like Bitcoin and Ethereum cannot be traced was incorrect, this was not the case.
He went on to say that this is the reason their crypto payments company uses know your customer (KYC) and anti-money laundering (AML) measures to make sure that the money doesn’t go to waste.
Moharem also said that their company is happy with the VARA guidelines. He noted that while this may eliminate a small number of digital currencies, it reaffirms the legitimacy of Bitcoin (BTC) and Ether (ETH), among others.
“This news is potentially significant for growing digital currency payments, as the government is showing that they are protecting consumers as well as vendors,” said the spokesperson for the company. “Our company is very pro-regulation, and having a clear framework by which to operate in will only strengthen the industry.”
Additionally, the executive emphasized that although privacy coins may be affected, the effects will not be fatal. “Because the ban is not international, I don’t think these projects will completely disappear,” he stated. Moharem, on the other hand, was aware that the local market would be constrained in terms of both availability and distribution.
Moharem’s sentiments were echoed by Saqr Ereiqat, co-founder of Crypto Oasis, a venture capital firm that provides a variety of services to the local crypto ecosystem. According to Ereiqat, privacy coins are distinct from BTC and ETH, where provenance can be used to trace transactions, respectively. He elaborated on that:
“Think of privacy coins in the same way that you might think of US dollar bills—they’ve almost been passed from one person to another, making it impossible to trace their owner. This is a unique problem because allowing them could facilitate illegal trade.
Ereiqat suggested that the rules may have little effect on those who might be affected. The executive claims that their most recent data indicates that, out of the more than 1,000 projects supported by Crypto Oasis, no privacy projects have yet been launched. He stated,
Budrigannews also contacted a privacy project that might be affected by the new laws if they ever wanted to set up shop in Dubai. Christopher Goes, co-founder of Anoma’s privacy protocol, provided a viewpoint that was distinct from the others. He said:
“Regulators are demonstrating that they aren’t really working on behalf of the public, for whom privacy is a basic human right” by banning “privacy coins” rather than engaging in research into the technology.
In addition, Goes argued that technological systems that provide privacy should not be referred to as “privacy coins.”
“A “privacy coin” does not exist.” He elaborated, “There are technological systems like Bitcoin in which users have control over who they disclose their transaction information to, and technological systems like Zcash in which users have control over who they disclose their transaction information to.”
Additionally, Binance offered its position on the issue. It was one of the first businesses to obtain a VARA license to operate in Dubai. Alexander Chehahde, general manager of Binance Dubai, stated that the new development demonstrates Dubai’s intention to become a “transparent and forward-thinking Web3 hub” benchmark. He elaborated on that:
“Binance is pleased with this new set of regulatory guidelines that support the creation of blockchain-enabled solutions, encourage innovation in the Web3 ecosystem, and focus on protecting users and investors.”
Additionally, some data mentioned by Ereiqat suggest that Dubai is on its way to becoming a genuine global crypto hub. He stated, “We are referring to this ecosystem as the Crypto Oasis because we are witnessing an unprecedented migration of Talent and Capital from around the world into the UAE.” Ereiqat claims that the Crypto Oasis currently employs more than 8,300 industry professionals.
