Crypto and blockchain lawyer Irina Heaver has expressed her belief that the newly-released regulations in United Arab Emirates (UAE) may impose a ban on crypto payments in the country.
During meeting of the board of directors of the Central Bank of the United Arab Emirates (CBAE) on June 5, discussions were held regarding projects under the country’s financial (FIT) program, an initiative aimed at promoting digital transformation.
The board approved the issuance of payment token services regulations to oversee and license stablecoins. Notably these new guidelines stipulate that payment tokens within UAE borders must be backed by UAE dirhams and cannot be linked other currencies.
Heaver has raised concerns about these regulations, stating that they effectively prohibit payments within the country. As per her interpretation, under these stringent rules, CBU will not allow cryptocurrencies to be used for purchasing goods and services unless they are licensed dir payment tokens or registered foreign payment tokens—neither of which currently exist.
In addition, Heaver believes that this regulatory development might contradict country’s pro-commerce and pro-in stance. She also highlighted potential adverse effects on investment inflow as well as its alignment with economic principles.
Furthermore, Heaver asserts that Tether (USDT) has been integral to in Web3 and crypto spaces. Given UAE’s aim to develop this sector further, contends that these new rules pose a risk to its progress by forbidding stablecoins’ use in transactions. He emphasized,”This policy shift could signal a less favorable environment for the crypto industry, which is not beneficial for UAE’s image or its ambitions digital economy.”
Moreover, she pointed out that there is presently a lack of industry associations to Switzerland’s Crypto Valley Association in UAE – an absence which hinders effective lobbying against unfavorable policies like those imposed by Switzerland’s Financial Market Supervisory Authority (FINMA). According Heaver,”This lack means there’s no one who counters policies not thoroughly considered.”
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