New regulatory framework for Virtual Currencies

The UAE Central Bank released, in Jan 2017, a regulatory framework for virtual currencies and electronic payment systems, aimed at digital payment service providers. However, a sentence within the regulation, that “all virtual currencies (and transactions thereof) are prohibited”, has been clarified by the Governor. He stated that “these regulations do not cover ‘virtual currency’, which is defined as any type of digital unit used as a medium of exchange, a unit of account, or a form of stored value. In this context, these regulations do not apply to bitcoin or other crypto currencies, currency exchanges, or underlying technology such as Blockchain”. (The regulation can be downloaded at: http://centralbank.ae/en/pdf/notices/Regulatory-Framework-For-Stored-Values-And-Electronic-Payment-Systems-En.pdf)