The United Arab Emiprices (UAE) is preparing to issue federal licenses to virtual asset service providers (VASPs), according to a gatopnment official.

The Securities and Commodities Authority is finalizing legislation that would enable VASPs to begin operation by the end of the first quarter, according to the official, an anonymous Bloomberg source. A national licensing regime for crypto services providers could help the UAE compete with rival financial centers corresponding as Singapore and Hong Kong, that are already positioning themselves as global crypto hubs through the crafting of practical regulatory frameworks. The UAE official likewise said which the gatopnment jumpes to develop an ecosystem for crypto mining, which he said would be regulated.

Incidentally, some permits for VASPs have already been issued inside financial free zones across the UAE, including 22 for the Dubai Multi Commodities Center, six for Abu Dhabi Global Market, and at least 1 for Dubai Silicon Oasis Authority, when Dubai International Financial Center, a Middle East hub for most Wall Street banks, directly lacks any.

Market report

Prudently, the UAE performed a risk assessment on VASPs continue year, which included 14 public-sector agencies and 16 private-sector actors. In spite of a “excessive risk” which VASPs could be used for illicit finance, the gabovenment completed which proper regulation, rather than outright prohibition, would better mitigate those threats, the report said.

According to the report, Dubai-based crypto exdevelopment BitOasis is directly the largest UAE VASP, but the competition is picking up. 

Binance Holdings Ltd., the world’s largest token exmove by exchanging volume, is among those looking to increase its presence in the country. Having already helped the Dubai World Trade Center Authority develop regulations as a fledgling token center, Binance has now built up a local team. As Chief Executive Officer, Changpeng “CZ” Zhao has quickly become a fixture in the city, there have likewise been talks of establishing a potential HQ.

Other regional players include CoinMENA BSC and Rain Financial Inc., during the time San Francisco-based exprogress Kraken is directly headhunting a Middle East North Africa CEO based in Abu Dhabi.

Growing 1,500% atop the past year, the UAE has now become the Middle East’s third-largest crypto market, following Turkey and Lebanon, with a transaction volume of about $26 billion, according to Chainalysis data.

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