What To Know
- Com, and Paybis’s Chief Revenue Officer, Uldis Teraudkalns point to the UAE as having a stable legal environment and access to finance and an excellent geographical location for business.
- Currently, the UAE is considered an innovative country in terms of the use of cryptocurrencies and is interested in creating favorable conditions for crypto companies.
- The legal framework and a strong base make the UAE suitable for the next wave of innovations in the sphere of cryptocurrencies.
The UAE is proving to be a favored jurisdiction of choice for crypto and stablecoin businesses escaping the new EU crackdown next year. Gurus estimate that most virtual asset firms will shift their bases to Dubai and Abu Dhabi due to MiCA regulation to take effect on 30 December, 2024.
MiCA also implies all-round licensing and supervisory rules in 27 EU countries that strive to improve the stability of the market. However, these measures including seeking to ensure that smaller stable coin issuers keep 30% of their reserves in low risk EU based commercial banks and larger issuers such as tether keeping 60% or more of their reserves as cash has sparked debates over stability and risk.
UAE: A Haven for Crypto Firms
Market professionals pointed to regulatory support for cryptocurrencies as one of the reasons for such companies exiting the EU. Rabea Ataya, CEO of Bayt.com, and Paybis’s Chief Revenue Officer, Uldis Teraudkalns point to the UAE as having a stable legal environment and access to finance and an excellent geographical location for business. Currently, the UAE is considered an innovative country in terms of the use of cryptocurrencies and is interested in creating favorable conditions for crypto companies.
While some firms may consider transfers within the EU to other jurisdictions that are more favourable, others are looking elsewhere. Other countries that border regions which are investing in South Korea such as the UK and Switzerland also stand to benefit from this movement.
Challenges and Opportunities
The WeFi growth chief came from Ripple, Agne Linge, also observed that while MiCA capital rules could impact those small firms, they might lead to industry contraction and lesser competitors. However, larger players which include Tether, with massive funds and a worldwide presence, ought to endure.
The EU is the biggest loser when crypto start-ups look for cheaper, more friendly locations like the UAE. The legal framework and a strong base make the UAE suitable for the next wave of innovations in the sphere of cryptocurrencies.
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