With the emergence of cryptocurrencies, a new age of financial innovation began. Consumers and investors alike quickly embraced digital currencies. Governments worldwide seek methods to regulate cryptocurrencies as they develop from speculative investments to a new asset class.
In this article, we’ll examine what makes the cryptocurrency industry exchanges and why having a license for cryptocurrencies is essential.
What is a Crypto License?
A cryptocurrency license gives a business the green light to run a cryptocurrency exchange. It is distributed by regulatory organizations regulating financial activities in their respective nations.
Every company involved in a cryptocurrency-related activity needs the proper license. It ensures that the cryptocurrency business can protect the digital assets of its clients and complies with all legal requirements. The requirements for obtaining one may differ significantly from country to country. Some examples of the different crypto licenses available are exchange, wallet, and custodial licenses.
Additionally, the license helps mitigate the risks of operating a crypto exchange platform. It helps to provide credibility and ensure all crypto businesses are regulated and compliant with local laws. Meanwhile, a licensed crypto trading service can expand and cater to a large clientele.
Obtaining a Crypto License in the MENA Region
Generally, you need a license before you can set up and run a Bitcoin trading venture. The process that needs to be followed depends on the country where your business will be based. However, there are frequently a few standard conditions that must be fulfilled in every jurisdiction, such as,
- Party’s ID verification
- Set up with a bank or other financial institutions to set up a fiat currency exchange
- Complete adherence to anti-money laundering laws and procedures
Many governments issue two licenses: one for operating Bitcoin wallets and one for operating cryptocurrency exchanges. Understanding your long-term objectives and the operations you plan to carry out is crucial before obtaining a cryptocurrency license.
Only Bahrain and the United Arab Emirates have developed comprehensive digital asset laws. Bahrain published a regulatory framework for digital assets in 2019. With the proper approval from the Central Bank, their government legalized the transactions of enterprises focused on cryptocurrencies.
Similarly, a regulatory agency known as Abu Dhabi Global Markets in the UAE published a detailed outline of the rules to follow when conducting cryptocurrency transactions. Cryptocurrencies have also been classified as a commodity by the Dubai Multi Commodities Centre, which has made it possible for companies with DMCC-issued licenses to deal in them.
Here’s the full process of getting a crypto license in the UAE in 2024
Step 1: Apply for a cryptocurrency license in the SEZ after filling it out.
Step 2: Giving shareholders a documentation package, including passport scans and pictures.
Step 3: Delivering the project’s road map and funding approval.
Step 4: Choosing and renting a space that meets particular criteria.
Step 5: Pay the crypto license fees
Meanwhile, other Middle Eastern nations have declared cryptocurrency assets illegal or have yet to create clear restrictions.
