Bitcoin and Cryptocurrencies are Exempt from UAE’s Virtual Currencies Ban

The Central Bank of the UAE clarified new regulations that caused fear among Bitcoin exchanges and other startups.

The Central Bank of the United Arab Emirates (UAE) has clarified its policy regarding the use of bitcoin and all other cryptocurrencies after causing a small stir among the country’s fintech community.

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After new regulations that came into affect at the start of 2017 read that “all virtual currencies (and any transactions thereof) are prohibited”, bitcoin exchanges and other cryptocurrency startups in the UAE feared that their operations had become illegal. This could have hurt efforts to cultivate the country’s fintech ecosystem in contrast to the stated purpose of the move.

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However, after this was pointed out, UAE central bank governor Mubarak Al Mansouri issued a response to local newspaper Gulf News: “These regulations do not cover ‘virtual currency’ which is defined as any type of digital unit used as a medium of exchange, unit account, or a form of stored value. In this context, these regulations do not apply to bitcoin or other crypto – currencies, currency exchanges, or underlying technology such as blockchain.”

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Last month it was revealed that Blockchain, the bitcoin wallet provider and developer of cryptocurrency and distributed ledger software, is set on a big expansion of its operations in the markets of the Middle East. Its chief executive Peter Smith said at the World Economic Forum 2017 at Davos: “I am very optimistic about the Middle East and we plan to invest big there. I’m really excited about it. It’s a great chance to build a new financial infrastructure in the region. What’s exciting is that there’s this big drive for change in the economies. Saudi Arabia and the UAE want to leapfrog into the digital age in financial technology.”

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