🚨 UAE’S NEW REGULATIONS MAY BAN CRYPTO PAYMENTS, LAWYER WARNS 🚨
🛑 Potential Ban: The UAE's new regulations might spell trouble for crypto payments, suggests crypto and blockchain lawyer Irina Heaver. This policy shift could create a less welcoming environment for crypto in the UAE.
🔄 Regulatory Shift: On June 5, the Central Bank of the United Arab Emirates (CBUAE) board discussed new financial infrastructure projects, including regulations for payment token services. These guidelines mandate that payment tokens must be backed by UAE dirhams and can't be linked to other currencies.
Crypto Payment Ban: Heaver told Cointelegraph that these rules essentially prohibit the use of cryptocurrencies for payments within the country. She noted, "The CBUAE is prohibiting the acceptance of cryptocurrencies for goods and services unless they are licensed dirham payment tokens or registered foreign payment tokens, neither of which currently exist."
⚖ Contradicting Policies: This new development appears to clash with the UAE’s historically pro-commerce and pro-investment stance. Heaver emphasized, “Historically, the UAE has thrived on foreign direct investment due to its liberal policies, including the absence of capital controls and the allowance for freedom of contract under the commercial law.”
💸 Economic Impact: Heaver is concerned about the impact on foreign investment inflow and the alignment with the country’s economic principles. She highlighted Tether (USDT) as a crucial component in Web3 and crypto transactions, noting that the ban on stablecoins could hinder the sector's progress.
🚫 Unfavorable Environment: “This policy shift could signal a less favorable environment for the crypto industry, which is not beneficial for the UAE’s image or its ambitions in the digital economy,” Heaver added.
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