An Analysis of Cryptocurrency Business Ecosystem in UAE Free Zones

An Analysis of Cryptocurrency Business Ecosystem in UAE Free Zones

Foreign investors seem to be sceptical about starting a cryptocurrency business in the UAE due to doubts regarding the regulations. Even though the crypto assets trading business is still in a nascent stage in the country, certain free zones offer robust regulations on crypto company formation in Dubai, UAE. Free zones such as Dubai Multi Commodities Centre (DMCC), Abu Dhabi Global Market (ADGM), and Dubai Airport Free Zone (DAFZA) have made the landscape of business setup in the UAE attractive for crypto investors.

More importantly, Dubai World Trade Centre (DWTC) has announced its plans to start a specialised crypto zone within the free zone premises, which will enhance the landscape of business setup in Dubai. Investors can consult with business setup consultants in Dubai to have more information on the crypto assets activities initiated by the free zones. Meanwhile, read this article to get more insights on the current crypto-asset ecosystem created by UAE free zones.

Crypto Zone in Dubai World Trade Centre

The Dubai government announced in 2021 December that the DWTC will become a comprehensive zone and regulator for virtual assets and crypto-assets such as digital assets, products, operators and exchanges. The DWTC will soon design a comprehensive ecosystem within Dubai for cryptocurrencies.  The DWTC plans to collaborate with the private sector and relevant entities to create an attractive environment of business setup in Dubai for the crypto assets.

The DWTC Authority will also enforce stringent standards for investor protection and Anti Money Laundering & Combating the Financing of Terrorism (AML-CFT) compliance. The Authority will further develop Dubai virtual assets and markets apart from creating a framework for innovative financial products, adopting new trends that rely on advanced underlying blockchain technology, such as non-fungible token (NFT) and cryptocurrencies. DWTC will also set out a regulatory framework for Virtual Asset legislative and enforcement policies.

Crypto Licenses in Dubai Multi Commodities Centre

The DMCC free zone has developed one of the best ecosystems of business setup in Dubai for crypto trading. The free zone has a dedicated crypto centre catering to the business requirements of cryptocurrency entrepreneurs. DMCC offers two specialised trade licenses for investors engaged in cryptocurrency businesses.  A Crypto Trading License enables proprietary trading in Crypto commodities. The license authorises the activities such as buying and selling crypto commodities developed on distributed ledger technology applications.

The second license is called the Distributed Ledger Technology Services permits activities such as database management solutions and ancillary services based on distributed ledger technologies, such as blockchain. However, investors who obtain the two types of DMCC crypto licenses are forbidden from carrying out activities such as crypto exchange, crypto brokerage services, financial services, banking services, payment processing or storage services.

CryptoCurrency License in Dubai Airport Free Zone

DAFZA started issuing trade licenses to cryptocurrency businesses in 2021. The free zone signed an agreement with the Securities and Commodities Authority (SCA) in May 2021 to facilitate the regulation, offering, issuance, listing and trading of crypto assets within the free zone. The free zone’s decision to offer cryptocurrency licenses is expected to bolster the environment of business setup in Dubai.

Crypto Business in Abu Dhabi Global Market

ADGM, one of the leading financial centres in the world, was the first in the Middle East to issue legislation to regulate virtual assets. ADGM follows a Virtual Assets Regulation developed by the free zone’s regulator Financial Services Regulatory Authority (FSRA) in 2018. Following the passage of the regulation, the financial free zone started issuing licenses to top crypto exchanges such as BitOasis, Digital Assets Exchange, Matrix Exchange and MidChains, among others. The ADGM’s cryptocurrency regulation facilitates arranging, advising, dealing, and managing crypto assets, crypto-asset exchanges that are treated similarly to multilateral trading facilities.

Jitendra Business Consultants can help you to Obtain Cryptocurrency License in the UAE

The landscape of business setup in Dubai has evolved drastically in tandem with the developments in the field of technology and finance such as blockchain and cryptocurrency. Progressives free zones in the UAE such as DWTC, DMCC, ADGM and DAFZA have started facilitating cryptocurrency businesses within the free zone premises. Since cryptocurrency is a new area of company formation, it is advisable to seek the advice of business setup consultants in Dubai such as Jitendra Business Consultants (JBC).  We have a team of highly qualified business setup consultants who can offer you the best company formation solutions for your cryptocurrency firm in the UAE. JBC can help you choose the best Freezone License based on your business requirements.

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