UAE will ban cryptocurrency payments, only allow CBDC? Lawyer: Unfavorable to the development of digital economy

Crypto lawyer Irina Heaver tweeted that the "Stablecoin Supervision and Licensing Regulations" approved by the Central Bank of the United Arab Emirates (CBUAE) at the beginning of this month will in disguise prohibit stablecoins other than those based on the local legal currency Alian Dirham (DH). Coin payment. This is quite detrimental to the country, which has been seen as actively promoting the digital economy in the past.

UAE Financial Infrastructure Transformation (FIT) Plan

Earlier this month, the Board of Directors of the Central Bank of the United Arab Emirates (CBUAE) discussed the country’s “Financial Infrastructure Transformation (FIT) Plan”, aiming to promote financial innovation and digital transactions and drive the country’s digital economy.

At that time, the meeting approved the issuance of stablecoin regulatory regulations, which clearly regulated the issuance, licensing and supervision details of payment tokens.

Kokila Alagh, founder of KARM Legal Consulting Company, mentioned in an interview with local media Unlock Blockchain: The stable currency must be supported by the United Arab Emirates dirham (DH) and cannot be linked to other currencies or digital assets; at the same time, stores and Service providers can also only accept payments in UAE dirham-based tokens, and consumers cannot pay via other virtual assets.

The UAE plans to ban crypto payments?

Irina Heaver, a lawyer in the field of encryption, expressed concern on social media

1. New regulations require that payment tokens

• must be backed by the United Arab Emirates Dirham (DH) and must not be pegged to other currencies.

2. Only the stable currency

• Central Bank Digital Currency (CBDC) based on the United Arab Emirates dirham, the "digital dirham", can be issued and used for daily consumption.

3. Fines or Sanctions for Violations

• CBUAE may impose fines or sanctions for the above violations.

4. Heaver pointed out

• that the new regulations contradict the UAE’s previous pro-business stance.
• The crypto industry environment in the UAE has become unfavorable, running counter to the country’s image and digital finance goals.

5. The UAE lacks a crypto industry association

• The lack of industry associations like the Swiss Crypto Valley Association is not conducive to assisting in the fight against improper regulations.

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