The UAE Central Bank has issued new anti-money laundering and counter-terrorism financing guidance for banks and other financial institutions dealing with cryptocurrencies and NFTs.
As crypto adoption grows, central banks around the world are adopting new anti-money laundering and counter-terrorism financing guidelines for financial institutions.
New crypto and NFT guidelines in UAE
The new guidelines set by the UAE’s central bank will come into effect within a month. These guidelines will be applicable to all licensed financial institutions, including banks, finance companies, exchange houses, payment service providers, registered hawala providers, insurance companies, agents, and brokers.
Central bank’s guidelines discuss risks while dealing with cryptocurrencies and crypto service providers and signifies the effective implementation of legal obligations for licensed financial firms. In addition, the central bank also provides clear definitions of virtual assets, virtual asset service providers, and their business models.
UAE continues to strengthen crypto regulations
The Governor of the UAE Central Bank, Khaled Mohamed Balama, said, “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.”
The UAE is among the top countries that are leading the regulations of the digital asset industry. As reported earlier, Dubai, one of the seven emirates, formed a dedicated regulator overseeing the digital asset industry. Abu Dhabi-based federal agency, the Securities and Commodities Authority, also started accepting license applications for cryptocurrency services in April this year.
As per the law, all UAE-based companies offering virtual asset services, except those licensed to operate in economic-free zones, must submit their license applications. In Dubai, companies must apply to the Virtual Assets Regulatory Authority (VARA) and seek SCA approval through a standardized process designed to streamline licensing.
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