The issuance of the guidance coincides with the country’s efforts to attract crypto firms through a welcoming regulatory environment.
The Central Bank of the UAE released updated guidance on Anti-Money laundering (AML) and combating the financing of terrorism (CFT) measures specifically designed for crypto businesses.
The newly issued guidance addresses the potential risks associated with engaging in transactions involving virtual assets and virtual asset service providers (VASPs), aligning with the recommendations put forth by the Financial Action Task Force (FATF). These updated regulations will be enforced starting one month from now.
UAE Central Bank’s move will affect all UAE-based financial institutions
The introduced measures will have an impact on licensed financial institutions operating in the United Arab Emirates. This includes various entities such as banks, finance companies, exchange houses, payment service providers, registered hawala providers, insurance companies, as well as agents and brokers associated with these institutions.
Khaled Mohamed Balama, Governor of the CBUAE, stated that “the new guidance related to the virtual assets sector contributes to strengthening the supervisory and regulatory frameworks of the Central Bank to combat money laundering and the financing of terrorism.”
He also stated that the United Arab Emirates (UAE) Central Bank emphasized its ongoing commitment to enhancing efforts in combating financial crime activities. He added that they are constantly working on reducing the potential risks to protect the monetary and financial system and, at the same time, maintain stability.
The United Arab Emirates (UAE) has taken a conservative yet forward-thinking stance regarding cryptocurrencies. Although cryptocurrencies are not specifically covered by any laws or regulations, the UAE government has recognized the potential advantages of blockchain technology and taken steps to encourage its adoption.
A number of programs and frameworks have been established by the UAE government to encourage innovation in the blockchain and cryptocurrency sectors.
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