According to TechFlow, Irina Heaver, a blockchain lawyer in the UAE, said that the latest regulations issued by the UAE may ban crypto payments in the country. The board of directors of the Central Bank of the United Arab Emirates (CBUAE) discussed projects under the country's Financial Infrastructure (FIT) program on June 5 and approved the release of payment token service regulations. The new guidelines suggest that payment tokens in the UAE must be backed by dirhams and cannot be pegged to other currencies.
Heaver noted that these new regulations prohibit the use of cryptocurrencies for payment of goods and services unless they are licensed dirham payment tokens or registered foreign payment tokens, neither of which currently exist. She believes this contradicts the UAE's traditional pro-business and pro-investment stance and may affect foreign investment inflows.
Heaver also said that Tether (USDT) has been the "backbone" of Web3 and crypto trading, and the new regulations could hinder the development of the field and damage the UAE's image and ambitions in the digital economy. She also emphasized that the UAE lacks industry representative organizations like the Swiss Crypto Valley Association, which puts the country's Web3 and crypto industries at a disadvantage in dealing with unfavorable policies.