On this episode of Bracewell Crypto Bits hosted by Anne Termine, Amelia Bowring shares insights from the World Blockchain Summit, including why Dubai has become a hotbed for cryptocurrency.
In terms of the UAE, can you give us a sense of what’s happening there with terms of crypto and blockchain? It seems like Dubai especially is becoming a hotbed for crypto activity.
From the blockchain conference, it was very clear that the UAE officials wanted to say for sure that they want to have a lot of businesses investing in the UAE and they’re very flexible in terms of how they will accommodate business in the UAE. A bit of background as to how the UAE works for incorporating companies. The seven emirates in the UAE, where you can incorporate onshore companies, has its own laws and the federal laws apply. There’s also the different free zones in the UAE. There’s about 45 free zones. and they all have their own specific niches.
What is the difference between the federal laws and the laws within the free zones, and how hard is it to keep track of which one you’re subject to?
In the UAE, because it’s a relatively new exposed country, and regulations are relatively new, whereas in the US or the UK there’s quite established principles to base new regulations on, it means that you really have to keep in touch with the regulators here and the authorities. As Bracewell’s office in Dubai, we have regular contact with the UAE authorities to make sure we’re on top of updates.
For example, in the UAE, all of a sudden there’ll be a new regulation. There won’t be much discussion on it. There won’t be much review of it. There will be an anticipation that maybe something’s happening, but you’ll just be hit with the regulation. Quite often, executive regulations that say a lot of the meat will come later, and we’re anticipating more regulations to come. It’s ever-changing, and we are trying to keep on top of it as much as we can.
Didn’t Dubai recently come out with a new regulation with respect to crypto?
Yes. In February this year, there was a new virtual asset regulation and that was issued by the Dubai World Trade Center, which in itself is a free zone. That regulation was pretty much just a set up the authority which would oversee the issuance of licenses for virtual asset related companies. Quite interestingly, we had a conversation with them very recently and they mentioned that they weren’t going to issue any licenses until June this year when they’re going to introduce a new, more substantive regulation.
But again, as an example of the UAE trying to be as flexible as possible, we are aware that Binance, for example, have already been issued a license by this authority. Pre-regulation and full regulation, Binance have already been issued a license and that’s because they’re a household name, the UAE recognize that they really want to accommodate them. And they’re working with them quite closely to make sure that what their activities are doing now are going to be consistent with the new regulation when that comes in.
In terms of the companies you have mentioned at the conference, were there any regulators at the conference?
There were representatives from some of the authorities, and they were there to get these points across about just being open with the authorities and come and speak to us. They were very good points of contact for the businesses that were there that were looking to incorporate, and they had a direct contact with these representatives, which was fantastic to see that facilitated even at that conference. I know there must have been a lot of applications for licenses that actually came through that conference. The conference made it very clear that the UAE really wants transparency with these companies.