Crypto Currency has been around for some time now and while some countries have accepted it as a legit part of the financial systems, others are still on the fence. UAE falls in the former category as it has taken to Crypto Currency like only a few other countries have.

When it comes to the legality of it all, the Central Bank of Dubai still does not consider it a legal tender and neither does the government regulate it. However, the government has facilitated the use of crypto in several other ways and we see this on the ground in many ways.

Not only do lots of businesses in the UAE accept Crypto Currency but we also see the government issuing licenses for Crypto Currency and facilitating trading, all in a bid to become one of the first countries to be powered by blockchain.

In this spirit, today we will learn more about Crypto Currency licensing in UAE, particularly Dubai and see how it all works.

What is Crypto Currency?

Crypto Currency is a virtual currency in the form of digital coins, that you get through crypto mining etc. It is a decentralized currency and only exists virtually, but it can be traded online through crypto wallets and can be used to buy goods and services.

Cryptocurrency is fully encrypted, making it difficult to steal or counterfeit, and also making the holders of the currency anonymous. Common examples of Crypto Currency are Bitcoin, Ethereum and meme coins, etc.

What is a Crypto Currency License?

In a bid to regulate Crypto Currency, the government of UAE issues licenses to businesses that are involved in activities related to Crypto Currency. In essence, it is a legal authorization by the government for that business to take part in activities like buying, selling, and holding Crypto Currency, etc.

Issuing these licenses is beneficial for both the government and businesses as it somewhat regulates the whole practice and curbs illegal activities like money laundering. For businesses, it gives them legitimacy and a seal of approval from the government to conduct their business.

Types of Crypto Currency Licenses

There are several different types of Licenses issued in UAE, particularly in Dubai and they are as follows.

• DMCC Crypto License: DMCC stands for Dubai Multi Commodities Centre and is a free zone that offers two different types of licenses. One is for Crypto Currency trading and the other is for blockchain management and solutions development.
• IFZA Crypto License: IFZA stands for International Free Zone Authority and they issue licenses for assets management related to Crypto Currencies and trading.
• DAFZA Crypto License: DAFZA stands for Dubai Airport Free Zone Authority and they issue licenses mainly for Crypto Currency trading.
• ADGM Crypto License: ADGM stands for Abu Dhabi Global Markets and they issue licenses for almost everything related to Crypto Currencies, like selling, buying, and storage.
• DWTC Crypto License: Dubai World Trade Center or DWTC deals with almost everything related to Crypto Currency. Not only do they issue licenses for trading Crypto Currencies but also for registration of Crypto Exchanges, management of Crypto assets, and even registration of new currencies.
• VARA Crypto License: Lastly there is the Virtual Assets Regulatory Authority that issues licenses for any and all virtual assets related activities like handling and storage of Crypto Currencies and NFTs etc.

There are several reasons for having so many different types of licenses. The first one is that some of these licenses are based on geography and zones in which they are valid. Secondly, they also differ on the basis of activity related to the Crypto Currency and the scope and the risk involved.

Criteria for getting a Crypto License in UAE

To get a Crypto Currency License in UAE, particularly for trading you need to fulfill certain criteria and it is as follows.

• There is lots of paperwork involved and you need to do a lot of documentation, details of which are discussed in the next heading.
• You are required to have enough assets and funds to keep you functioning for at least six to twelve months.
• You need to ensure you possess sufficient security measures to ensure the protection of all the virtual assets under your care. This means having the best available encryption tools, multiple-factor authentication, and security measures.
• Lastly you need to ensure that you will comply with all the rules and regulations and will provide accurate financial reports and asset details when audited.

Documents required for getting a Crypto License

To get your Crypto Currency license and register your business you need to provide the following documentation.

• A detailed business plan to show how the business will be run.
• Copy of valid passports and Visas of all the owners and partners.
• A financial report detailing assets and funds available for business operations for six to twelve months.
• A detailed report outlining all the security measures taken by the company to ensure data protection.
• A report detailing Anti Money Laundering (AML) policies and procedures.
• A Memorandum of Agreement or MOA.
• A No Objection Certificate from the Securities and Commodities Authority (ACA).
• Depending on the license you are getting there are other documents that you may need to provide.

Steps to getting a Crypto Currency License in UAE?

If you meet the criteria and have all the necessary documents then the next step is to apply for the license and this is how you do it.

• The first step is to select a name for your business and register as a legal entity in the region.
• Next, you need a jurisdiction you want to get your license in. This is related to the different zones and licenses that we have discussed above.
• After you have done that, you need to open a corporate bank account and deposit the necessary funds to operate the business.
• Next, you need to submit all the necessary documentation that is required of you for the license.
• Then you will submit the application and pay all the necessary fees associated with the licensing process.
• Lastly, you need to wait for the relevant authorities to verify your application and all the necessary information you provided.
• Once all this is done, you will be issued your license.

Note: The time period to get the license varies, but it can take between 4 weeks to 6 months to get a Crypto Currency license.