The United Arab Emirates (UAE) government recognizes the potential benefits of cryptocurrencies and blockchain technology, such as increased transparency, efficiency, and transaction security. In 2019, the UAE government launched the Emirates Blockchain Strategy 2021, which aims to implement blockchain technology across various sectors, including healthcare, education, energy, and transportation.

In 2019, the UAE Securities and Commodities Authority (SCA) issued regulations on issuing and trading cryptocurrencies and initial coin offerings (ICOs) to provide a framework for companies operating in this space.

This article will provide you with crucial information on the cryptocurrency license in Dubai and how to get a cryptocurrency license via Dubai Multi Commodities Centre (DMCC)

Why Dubai is the Place to Be for All Things Crypto!

Dubai has emerged as a hub for cryptocurrency businesses in recent years, with several companies operating in the country’s blockchain and cryptocurrency industry. One factor contributing to the UAE’s growth of crypto businesses is the country’s favorable regulatory environment.

The UAE SCA’s regulations have helped create a more stable and predictable regulatory environment for crypto businesses, encouraging more investment and growth in the industry.

The Dubai Future Foundation launched the Global Blockchain Council to explore the potential applications of blockchain technology across various sectors. The UAE government has also launched the Dubai Blockchain Strategy to make Dubai the first blockchain-powered city.

These initiatives have helped to create a supportive ecosystem for crypto businesses in the UAE, attracting entrepreneurs, investors, and talent from around the world. As a result, several crypto exchanges, wallet providers, and payment platforms have established a presence in the UAE. In addition, the country has also seen the launch of several ICOs, and blockchain-based startups launch.

Overall, the growth of cryptocurrency businesses in the UAE can be attributed to the country’s favorable regulatory environment, government support for blockchain technology, and a talented and diverse workforce.

What is a Cryptocurrency License in Dubai and Its Regulatory Landscape

The emergence of Dubai as a global hub for innovation and technology extends to the realm of cryptocurrency. To operate a legitimate and compliant crypto business within this dynamic landscape, a cryptocurrency license is essential. This license acts as a regulatory seal of approval issued by a designated authority in Dubai, signifying your adherence to established frameworks.

The Dubai Virtual Asset Regulatory Authority (VARA)

Established in 2020, the Dubai Virtual Assets Regulatory Authority (VARA) serves as the primary governing body for the cryptocurrency sector in Dubai. VARA is tasked with fostering a robust and transparent ecosystem for virtual assets while mitigating potential risks associated with these novel financial instruments.

The VARA accomplishes this through a comprehensive framework that includes:

• Licensing and Regulatory Oversight: VARA implements a licensing regime for various crypto-related activities, ensuring businesses operate within defined parameters.
• Anti-Money Laundering (AML) and Know Your Customer (KYC) Compliance: VARA enforces stringent AML and KYC regulations to combat financial crime and promote transparency within the crypto space.
• Consumer Protection: VARA prioritizes consumer safety by establishing guidelines for fair market conduct and investor protection within the crypto industry.

Types of Cryptocurrency Licenses in Dubai

Dubai’s regulatory framework offers several cryptocurrency license options, catering to the diverse needs of businesses. Here’s a brief overview of some prominent licenses:

• VARA Full Operating License: This comprehensive cryptocurrency exchange license grants permission for a broad range of crypto activities, including operating a cryptocurrency exchange, offering custody services, and providing payment processing solutions.
• DMCC Crypto License: Issued by the Dubai Multi Commodities Center (DMCC) Free Zone Authority, this license caters to businesses involved in storing, managing, and trading the crypto asset or digital asset. It offers specific benefits like ownership repatriation and potential tax exemptions within the free zone.
• Limited VARA License: This license targets businesses with more restricted crypto operations, such as providing advisory services or operating a multilateral trading facility (MTF) for virtual assets.

The specific license type most suitable for your business will depend on the nature of your crypto activities and your operational goals within Dubai’s evolving regulatory environment.

Understanding the DMCC Crypto License

The DMCC Crypto Currency License, issued by the Dubai Multi Commodities Centre (DMCC) Dubai UAE Free Zone Authority, presents a compelling option for businesses seeking to enter the Dubai cryptocurrency market. This license caters specifically to activities involving the storage, management, and trading of crypto assets.

Activities Permitted under the DMCC Crypto License:

• Crypto Storage and Management: License holders can offer secure custody solutions for storing client’s crypto assets. This includes managing private keys and safeguarding digital wallets.
• Cryptocurrency Trading: The license permits businesses to facilitate the buying and selling of cryptocurrencies on their platforms. This may involve acting as a broker or intermediary for crypto trades.
• Consulting Services: Licensees can provide advisory services related to cryptocurrencies, such as market analysis, investment strategies, and regulatory compliance guidance.

Benefits of Obtaining a DMCC Crypto License:

• Access to a Regulated Market: Operating under the DMCC Crypto License signifies your commitment to regulatory compliance. This allows you to participate in a legitimate and well-defined crypto market within Dubai.
• Enhanced Credibility: The DMCC License serves as a badge of trust, demonstrating your adherence to established standards. This fosters investor confidence and strengthens your business reputation within the crypto community.
• Streamlined Business Setup: The DMCC Free Zone offers a streamlined business or companu setup process with benefits including ownership repatriation (allowing full repatriation of profits), potential tax exemptions, and access to world-class infrastructure.
• Collaborative Ecosystem: The DMCC Crypto Centre provides a dedicated co-working space for license holders, fostering collaboration and networking opportunities within the Dubai crypto industry.

DMCC’s Role in the Local Cryptocurrency Scene

In recent years, DMCC has become increasingly involved in the blockchain and cryptocurrency industry. It has played a vital role in supporting the industry’s growth in the UAE.

One of the ways in which DMCC has supported the development of the cryptocurrency industry in Dubai is through the creation of the DMCC Crypto Centre . The Crypto Centre is a facility that provides a supportive ecosystem for startups and entrepreneurs working in the blockchain and cryptocurrency space. In addition, the facility offers office space, licensing, regulatory support, and access to funding and mentorship opportunities.

In addition to the Crypto Centre, DMCC has launched several initiatives to promote innovation in the blockchain and cryptocurrency industry. For example, DMCC launched a blockchain-enabled platform called “DMCC Tradeflow” that enables companies to track their commodities from production to delivery using blockchain technology. The platform is designed to increase commodity trading transparency, efficiency, and security.

DMCC Partnership with Cryptocurrency License Companies:

DMCC has also partnered with several blockchain and cryptocurrency license companies to explore the potential applications of blockchain technology in various sectors. For example, DMCC has partnered with Swiss-based blockchain company CV VC to launch a blockchain accelerator program in Dubai, which aims to support startups working on blockchain-based solutions for the commodities industry.

Here is a short list of other notable DMCC entities within the crypto sector:

• Regal Assets DMCC: A company that specializes in providing cryptocurrency investment solutions to institutional and individual investors. The company is based in the DMCC and offers various services. These services include cryptocurrency accounts, cold storage solutions, and investment management services.
• Emirates Digital Wallet : A blockchain-based payment platform designed to provide fast, secure, and low-cost transactions to users in the UAE. The platform is based in the DMCC and has partnerships with several leading banks and financial institutions in the region.
• Future Blockchain Summit : An annual event hosted by the DMCC focused on promoting innovation and collaboration in the blockchain and cryptocurrency industry. The summit brings together leading experts, investors, and entrepreneurs worldwide. They discuss the latest trends and developments in this rapidly evolving field.

DMCC has played an essential role in supporting the growth of the cryptocurrency industry in Dubai and the UAE. Through initiatives such as the Crypto Centre and partnerships with blockchain and cryptocurrency companies, DMCC has helped to create a supportive ecosystem for startups and entrepreneurs in the industry. Promoting innovation and growth in this exciting and rapidly evolving field.

Getting a DMCC Cryptocurrency License

The specific requirements for obtaining a crypto business license in the DMCC may vary slightly depending on the type of license being applied for and the nature of the company’s operations. The DMCC crypto license allows you to conduct crypto-business-related activities such as crypto software development, crypto management, crypto trade, and crypto consulting, among other forms of crypto services. However, in general, companies applying for a crypto license in the DMCC will need to meet the following criteria:

• Companies must submit a comprehensive business plan outlining their operations, objectives, and target market.
• They must have adequate financial resources to support their operations and meet the DMCC’s minimum capital requirements.
• Companies must have a strong management team with relevant industry experience and a track record of success.
• Companies must comply with all applicable regulatory requirements, including those set by the DMCC and other relevant authorities.
• Also, companies must have adequate security measures to ensure the safety and security of their customers’ funds (if applicable).

The application will be reviewed by the DMCC’s regulatory authorities. They will evaluate the company’s suitability for a crypto license based on the abovementioned criteria. Getting a crypto trading license for cryptocurrency should take approximately four weeks.

It’s important to note that the DMCC’s regulatory requirements for the cryptocurrency industry are still evolving. Therefore, companies operating in this space should regularly monitor regulatory developments and comply with all applicable requirements.

Focus on Cryptocurrency Business

Above all, we understand that tech entrepreneurs don’t have all the time to fill out tedious applications. Also, following up with free zone personnel for the status of their applications is not easy. We are here to make the incorporation process more manageable. We handle all your administrative work so you can focus on starting your business . Please speak to one of our consultants about how we can make your crypto company license dream a reality.