New UAE Regulations May Prohibit Crypto Payments, Says Lawyer

The United Arab Emirates (UAE) may be on the brink of banning crypto payments, according to crypto and blockchain lawyer Irina Heaver. Newly-released regulations by the Central Bank of the UAE (CBUAE) suggest that payment tokens in the country must be backed by UAE dirhams and cannot be linked to other currencies, potentially prohibiting the acceptance of cryptocurrencies for goods and services.

Heaver expressed concerns about the impact of these regulations on the country’s pro-commerce and pro-investment stance, noting that historically, the UAE has thrived on foreign direct investment due to its liberal policies. She also highlighted the importance of industry representation in advocating for the interests of the Web3 and crypto sector, pointing out that the UAE lacks a united voice similar to associations like the Crypto Valley Association in Switzerland.

The lawyer emphasized the role of stablecoins like Tether (USDT) in facilitating transactions in the crypto industry and warned that the new regulations could hinder the progress of the sector in the UAE. With the country aiming to develop its digital economy, Heaver believes that a less favorable environment for the crypto industry could be detrimental to its image and ambitions.

As the debate over crypto payments in the UAE continues, industry stakeholders and regulators will need to navigate the balance between innovation and regulation to ensure the growth and sustainability of the sector in the country.