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Dubai's Virtual Asset Regulatory Authority (VARA) and Dubai International Financial Center (DIFC) published updates to their crypto regulations. VARA updated its virtual asset rulebook and added new fiat-referenced virtual asset (FRVA) (or fiat-referenced stablecoin) regulations. VARAs exclude stablecoins pegged to the United Arab Emirates (UAE) dirham, which will remain under Central bank of the UAE regulation, and crypto-assets that reference central bank equity claims, central bank digital currencies (CBDCs), or tokenized bank deposits for interbank settlement purposes. [Read more at VARA] DIFC proposed a new securities digital asset law in a new consultation paper.

In the first quarter of 2023, the Central Bank of the United Arab Emirates (CBUAE) will start phasing in an Instant Payment Platform with a pilot group of licensed financial institutions. The initiative will enable payments processing and fund transfers in the UAE both around the clock and in real time. The new platform will enable the provision of the next generation of payment services to UAE financial institutions and consumers. https://www.centralbank.ae/media/muuenquk/cbuae-fosters-transformation-and-digitalisation-in-dialogue-with-financial-industry-officials_en.pdf

The Central Bank of the UAE (CBUAE) is reportedly operationalizing its domestic digital dirham central bank digital currency (CBDC). It is encouraging all UAE commercial banks and payments processors to participate in a pilot integration with the CBUAE digital dirham issuing node and has decreed digital dirham adoption by all UAE licensed financial institutions (LSIs) by 2026. In the immediate term, those LSIs are being encouraged to develop digital dirham use cases in the CBUAE sandbox.

The United Arab Emirates (UAE) has exempted crypto transactions from paying value-added tax (VAT) effect November 15, 2024 and applied retroactively to transactions since January 1, 2018. The UAE has essentially classified virtual assets in the same bucket as traditional financial services - several of which are already exempt from VAT. https://tax.gov.ae//Datafolder/Files/Legislation/Executive%20Regulation%20of%20Federal%20Decree%20Law%20No%208%20of%202017%20-%20Publish%20-%2004%2010%202024.pdf

Tether plans to launch a stablecoin pegged to the United Arab Emirates dirham (AED) fully backed by liquid UAE-based reserves. It will launch in collaboration with UAE-based Phoenix Group and Green Acorn Investments. It will join Tether's slate of stablecoin products that include USDT, EURT, CNHT, MXNT, XAUT and aUSDT.

While countries like Turkey, Iran and Israel are in the process of investigating the advantages of blockchain technology, the UAE, along with both Bahrain and Saudi Arabia, is leading the charge when it comes to positive crypto and blockchain legislation. The UAE, in particular, already hosts several blockchain initiatives that stand to benefit significantly from the new regulations.

The Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates (CBUAE) have agreed to a framework to promote use of Indian rupee (INR) and UAE Dirham (AED) usage for cross-border transactions, and work towards interlinking their fast payment systems (FPSs), to cut transaction costs by eliminating dollar conversions. More specifically, they will link India's unified payments interface (UPI) with the UAE instant payment platform (IPP), and also link their respective card switches (RuPay switch and UAESWITCH).

The Central Bank of the United Arab Emirates (UAE) is planning to issue a central bank digital currency (CBDC) for domestic and cross-border payments in order to help drive innovation for domestic payments, and address the problems and inefficiency of cross-border payments and respectively. The issuance of a digital dirham is one of nine initiatives of the central bank's Financial Infrastructure Transformation Program. https://www.centralbank.ae/media/mdupathy/cbuae-launches-a-financial-infrastructure-transformation-programme-to-accelerate-the-digital-transformation-of-the-financial-services-sector-en.pdf

The Central Bank of the United Arab Emirates (CBUAE) conducted its first cross-border digital dirham transfer using the mBridge central bank digital currency (CBDC) platform on January 29, 2024. A 50 million dirhams transfer was sent to China. https://gulfnews.com/business/video-first-cross-border-payment-made-using-uaes-digital-dirham-1.100731629

The UAE Central Bank (CBUAE) approved a framework for stablecoin regulation on June 14, 2024, which allows only dirham-backed stablecoins to be used for payments. Other crypto-assets will be restricted to trading, investment, and corporate treasury purposes while foreign stablecoins will only be permitted for purchasing specific virtual assets like non-fungible tokens (NFTs). The new law mandates that no entity can issue a payment token without submitting a white paper to the central bank for approval. Banks are not directly permitted to issue payment tokens but can do so through subsidiaries or affiliates, provided they meet licensing and regulatory requirements. The new framework is set to commence in June 2025.

The Central Bank of the UAE (CBUAE) unveiled the official symbol for its blockchain-based Digital Dirham central bank digital currency (CBDC). Issuance is expected to take place in the last quarter of 2025 for retail sector. The Digital Dirham, underpinned by Federal Decree-Law No. (54) of 2023, is set to become a legal tender, ensuring its acceptance across all payment outlets and channels alongside physical currency. https://www.centralbank.ae/media/ckkp3s3f/cbuae-unveils-new-dirham-symbol-en.p

The Dubai Land Department, the real estate arm of the Executive Council of Dubai, has partnered with UAE-based Mashreq Bank to release a blockchain-based mortgage platform.

UAE-based RAKBank is expanding its remittance routes using RippleNet blockchain technology. RAKBank and Bangladesh-based Bank Asia have partnered to allow users to transfer money between accounts at the two institutions within 24 hours. The announcement doesn't specify whether the service utilizes XRP, which is an option for RippleNet users.

BTW the Aber pilot benefits greatly from the fact that both the Saudi Riyal and UAE Dirham are pegged to the U.S. dollar at the same exchange rate, so there's no need to make the CBDC basket currency-based.

The Dubai government approved a new virtual assets law and established the Dubai Virtual Assets Regulatory Authority (VARA).  VARA will operate as an affiliated agency of the Dubai World Trade Center and will focus on compliance and disclosures of virtual asset service providers in the United Arab Emirates (UAE). The new agency will also handle the UAE's crypto licensing regime. These crypto licenses will only be given to firms that establish a business presence in the UAE.

The Bank for International Settlements (BIS) has handed the mBridge central bank digital currency (CBDC) based cross-border payments platform over to the central banks of China, Hong Kong, Saudi Arabia, Thailand and the United Arab Emirates (UAE). According to BIS General Manager Agustín Carstens, this was not because of "political considerations" but because after the project's four years it is "at a level where the partners can carry it on by themselves". This has happened already with other projects such as the Swiss National Bank's Project Helvetia. By "political considerations", Mr. Carstens was referring to stories that during discussions among central bankers and finance chiefs at the October 2024 International Monetary Fund and World Bank Annual Meetings, concerns were expressed about the fact that China is supplying the platform's key technological backbone, and that China and the UAE are BRICS members. (In that regard it is notable that the U.S. Federal Reserve has not joined the project.) https://www.bis.org/speeches/sp241031.htm

The Crown Princes of Saudi Arabia and the United Arab Emirates (Mohammed bin Salman and Sheikh Mohamed bin Zayed) reached agreement to develop a digital currency to enable trading between banks in the two countries.

The Central Bank of the UAE and the Abu Dhabi Global Market, the capital's international financial hub, invited fintech companies to compete in the annual FinTech Abu Dhabi Innovation Challenge. This year's challenge aims at developing innovative solutions to serve the financing needs of small and medium-sized enterprises. It also seeks to drive the adoption of regulatory technology solutions to "improve compliance outcomes and enhance regulatory processes".

The United Arab Emirates (UAE) approach to regulating crypto-assets has prioritized providing regulatory clarity and guidance to entities that want to engage in activities related to digital assets - providing notice as to the types of activities are permitted and prohibited. In contrast, U.S. regulators, have organized around an approach that provides no advance notice to industry participants, opting instead to bring charges which rely on untested and novel legal theories. 

The Central Bank of the United Arab Emirates (CBUAE) issued new guidance concerning anti-money laundering (AML) and countering financing of terrorism (CFT) measures for crypto businesses on May 31, 2023. It outlines the risks arising from dealing with virtual asset and virtual asset service providers (VASPs), taking into account the recommendations of the Financial Action Task Force (FATF). The new rules will come into effect in one month. https://www.centralbank.ae/media/avwlktgy/cbuae-guidance-for-lfis-on-risks-related-to-virtual-assets-and-virtual-assets-providers_final-clean-version1.pdf