Cryptocurrency and blockchain lawyer Irina Heaver believe New regulations issued in the United Arab Emirates (UAE) may ban cryptocurrency payments in the region.
Attorney Irina Heaver
On June 5, the board of directors of Central Bank of the United Arab Emirates (Central Bank of the United Arab Emirates – CBUAE) discussed projects under the financial infrastructure program (FIT), an initiative aimed at promoting digital transformation.
During the meeting, the council agreed to issue regulations on payment token services to monitor and license stablecoins. The new guidelines suggest the domestic payment token must be based on the UAE dirham and cannot be linked to other currencies.
UAE Lawyer: This is a Ban on Cryptocurrency Payments
Heaver believes that the new rules will lead to a ban on cryptocurrency payments in the country. According to the regulations, CBUAE “prohibits the acceptance of cryptocurrencies as payment for goods and services unless they are licensed dirham payment tokens or registered foreign payment tokens. Both types do not currently exist.
The blockchain lawyer also concluded that this new development may contradict the country’s pro-trade and investment stance.
“Historically, the UAE has thrived in foreign direct investment thanks to its liberal policies, including no capital controls and allowing freedom to enter into contracts under commercial law. This freedom allows parties to agree on the terms of their transaction, including payment method and currency.”
At the same time, Heaver highlighted concerns about the compatibility of new developments with the country’s economic principles and the impact on foreign investment flows.
The lawyer believes that USDT is the “backbone of transactions” in Web3 and cryptocurrency. With the UAE aiming to develop this sector, the new regulations will risk their growth in the space by banning the use of stablecoins in transactions.
“Such a policy change could signal a less favorable environment for the cryptocurrency industry. This is not beneficial to the UAE’s image or the country’s ambitions in the digital economy.”
The need for stronger industry representation
Heaver also added that the UAE lacks industry associations such as the Crypto Valley Association in Switzerland. The association has been campaigning against unfavorable regulations imposed by the Financial Market Supervisory Authority (FINMA) regarding staking.
“The lack of a unified voice in the UAE’s cryptocurrency and Web3 industry is a significant disadvantage. Existing associations are fragmented and often act as platforms for business development and transaction flows rather than advocating for industry interests.”
Heaver added that the lack of representation means there is no one to oppose policies that she believes are “ill-considered” and could be detrimental to the development of Web3 and cryptocurrency in the UAE.
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According to Cointelegraph
