As we close out 2024, it’s clear that this has been a pivotal year for crypto regulation worldwide. With top-tier governments recognizing Bitcoin as a strategic asset rather than a fringe experiment, and regulatory frameworks emerging to support this shift, the global crypto landscape is undergoing a profound transformation.
A Global Perspective
In the United States, President-elect Donald Trump’s plan to establish a strategic Bitcoin reserve has sparked excitement and debate. Rumors are now circulating that six other international governments are looking to emulate the US, including Russia, Japan, and Thailand. This bold move signals that governments worldwide are taking a serious look at Bitcoin as a strategic asset.
Across the Atlantic, the European Union’s Markets in Crypto-Assets (MiCA) directive has compelled crypto exchanges to over-comply by delisting non-compliant stablecoins ahead of regulatory deadlines. While this has pushed USDt out of what some might consider one of the world’s less relevant markets, Tether continues to grow its market share despite the EU regulatory shake-up.
The UAE’s Regulatory Landscape
With five regulators now available for companies seeking virtual asset services in the UAE, businesses can align with the legal environment best suited to their offerings. Regulatory arbitrage is a feature of the UAE’s crypto sector, but it needs to be navigated intelligently, bearing in mind the overarching federal regulations.
Key Developments in the UAE
- The Central Bank of the UAE (CBUAE) introduced the Payment Token Services Regulation via Circular No. 2/2024 in June 2024, regulating the issuance of stablecoins.
- After a 12-month grace period, businesses in the UAE will only be allowed to accept crypto payments in dirham-backed stablecoins issued by CBUAE-approved entities.
- The Abu Dhabi Global Market (ADGM) introduced a regulatory framework specifically for stablecoins, or ‘fiat-referenced tokens.’ Under these rules, issuers must fully back their tokens with reserves, maintain strong governance, and ensure rigorous transparency.
- A tax development from the Federal Tax Authority provided that all cryptocurrency transactions are exempt from value-added tax (VAT) from November 15, 2024, retroactive to January 1, 2018. However, this exemption only applies to those making a lot of trades on centralized UAE exchanges and being charged VAT on exchange fees.
Court Milestones and Media Misinterpretations
In a notable court decision, the Dubai Court upheld an employment contract stipulating that an employee’s bonus could be paid in the company’s native crypto tokens, in addition to other typical bonuses employees receive in the UAE. While some international media outlets reported that salaries can now be paid entirely in Bitcoin and crypto, such interpretations misread the ruling.
The judgment did not redefine wage laws; it merely recognized crypto tokens as a valid form of bonus payment within a specific employment contract. The public is urged to rely on official sources for accurate information rather than relying on speculation or media reports.
Regulatory Clarity Attracts Market Players
Regulatory clarity has a gravitational pull, and in 2024, it drew significant market players to the UAE. Heavyweights like Binance, Crypto.com, OKX, and Bybit received VASP licenses, expanding the range of services available, from exchange and lending to derivatives trading.
Ripple obtained in-principle approval from the Dubai Financial Services Authority within the DIFC. Meanwhile, in the ADGM, prominent companies such as Blockdaemon, Circle, Paxos, and eToro made significant expansions or relocations, attracted by the region’s clarity and business-friendly climate. Tether’s USDt was listed as an accepted token in ADGM.
Gazing into the Future
As 2024 draws to a close, the shape of the future is becoming more apparent. In the US, all eyes are on the incoming Bitcoin strategic reserve. Europe’s MiCA framework may tighten further, pushing more companies out of the EU.
Within the UAE, the trend is toward more granular rules for token issuance, stablecoins, and decentralized finance platforms. However, despite tighter regulations, the UAE is expected to attract even more global players.
Looking Ahead to 2025
Expect stronger Anti-Money Laundering (AML) rules, more defined stablecoin governance, and deeper cross-border regulatory cooperation in 2025. Buckle up, or rather, law up, for a year of increased regulatory scrutiny and innovation.
Irina Heaver is a leading Bitcoin and crypto lawyer based in the UAE and Switzerland, recognized globally for her extensive experience and technical expertise. She holds a Juris Doctorate from Monash University and a Master of Laws degree in International Taxation and Energy Laws from Melbourne University, with advanced specializations in AI and blockchain technologies.
This article is for general information purposes only and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
