Cryptocurrency ICOs in the UAE

Cryptocurrency ICOs in the UAE have become one of the most popular methods of attracting investments in recent years.

Thanks to the favorable business climate, high level of technical infrastructure, and availability of financial services, the United Arab Emirates has become a magnet for international investors in the cryptocurrency sphere. In the UAE, one can find many promising projects offering solutions based on blockchain technologies.

Attitude towards cryptocurrencies and blockchain

Until recently, the UAE demonstrated a negative reaction to the emergence of cryptocurrencies and all transactions related to them. However, the situation has changed, and the government has recognized the potential of digital currencies for economic growth and attracting investments. Since late 2017, the UAE has actively supported the development of blockchain technologies.

In April 2018, the Blockchain Strategy 2021 was launched, aimed at utilizing blockchain in various sectors of the economy, including finance, healthcare, education, and government administration. This program includes the establishment of specialized blockchain development centers, conducting training programs, and supporting startups in this field. Regulations for the use of digital assets have also been approved.

The Emirates have become a popular location for conducting Initial Coin Offerings (ICOs) – the issuance of new cryptocurrency tokens to attract investments. Several successful ICO projects have been implemented, attracting significant sums from investors.

When registering a company operating in the digital currency sphere in the UAE, it should be noted that the token may be considered both as a commodity and as a security. In the former case, ICO projects will be unregulated, while in the latter case, they will fall under the provisions regulating the financial services market.

One of such regulators is the FSRA, registered in Abu Dhabi. In addition to the FSRA, similar oversight is carried out by the DFSA – Dubai Financial Services Authority. The presence of regulators has provided investors with confidence in the safety of their investments and has contributed to the development of the cryptocurrency market.

The UAE is one of the most advanced countries in the world in terms of using digital technology and electronic payments. A large part of the population actively uses mobile payment systems, creating a favorable environment for the development of crypto projects.

Licenses for cryptocurrency activities

One of the important components of successful cryptocurrency ICO activity in the UAE is the presence of a license. Due to the rapidly growing interest in cryptocurrencies, the UAE government has decided to develop and implement a special regulatory system for this sector.

Regulation of the financial sector in the country is the responsibility of the Central Bank and the Securities and Commodities Authority. However, most of the rules for operating in the cryptocurrency market are determined by the CAAR position from 2020.

In 2022, Law No. 4 was adopted in Dubai, which, in turn, initiated the creation of VARA – the world's first virtual assets regulator. The task of this body is to simplify the application of regulatory acts related to cryptocurrency activities, protect investors, and stimulate the development of the fintech market.

It is VARA that is responsible for issuing licenses for activities related to the operation of virtual assets, including digital products, operators, and exchanges.

It is important to note that a license can only be issued to legal entities registered in the UAE. Additionally, the company must have sufficient capital and a professional team capable of ensuring the security of cryptocurrency operations.

Obtaining a license in the UAE allows the company to operate legally and attract clients from different countries around the world. It also enables participation in various international financial projects and cooperation with other market participants.

Cryptocurrency Activity in the UAE: Is It Worth Starting?

In recent years, the UAE has been actively developing the cryptocurrency industry. The favorable economic climate makes the country an attractive platform for both novice and experienced investors.

Among the key advantages of operating in this sphere are the following:

• High level of security and reliability: Activity in the United Arab Emirates is characterized by a high level of security and reliability. Government authorities strictly control the operations of cryptocurrency companies, ensuring the protection of investors' interests. Additionally, the UAE government provides incentives and tax benefits for blockchain project developers.
• Sophisticated financial system with high liquidity: The country has a well-developed financial system with high liquidity levels. This provides investors with ample opportunities to conduct successful ICOs. Furthermore, the UAE is home to several specialized financial regulators that ensure transparency and reliability in cryptocurrency operations.
• International financial center with infrastructure for ICOs: The United Arab Emirates is an international financial center with a developed infrastructure for conducting ICOs. It hosts major exchanges, startup incubators, and specialized blockchain centers. Moreover, the UAE actively attracts professionals from various countries, creating a favorable environment for partnership and knowledge exchange.

However, before starting cryptocurrency activities in the UAE, it is essential to study the legal aspects of conducting ICOs in the country and obtain all necessary licenses. It is also important to consider the high competition in the market and exercise caution when selecting projects for investment.

Assistance from The Level Consulting:

The process of registering a cryptocurrency company in the UAE has its peculiarities. To minimize all risks and receive necessary support, you can turn to the experts at The Level Consulting, a consulting company.

We are well-versed in all legal aspects of cryptocurrency activities in the UAE. We will not only assist with registration but also help obtain all necessary licenses. Our specialists will provide consultations on all matters related to organizing and conducting crypto business in the UAE, significantly simplifying the start of your company's operations in this country.