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Cryptocurrency is a form of decentralized digital currency, with no physical money in existence. It is not issued by a central body. Instead, it is generated by a process called mining.
Mining involves computer processors solving complex puzzles. Whenever a puzzle is successfully completed, a new block is added to the blockchain, and currency is generated to reward the miner.
Cryptocurrency is then stored either in online exchanges, digital wallets, or physical hardware. It can be sent between addresses either among individuals or organizations in the form of payment.
There are thousands of cryptocurrencies available to mine, buy, and trade. The most popular include Bitcoin, Ethereum, and Stellar.
Let’s start with the basics – what is the blockchain? In very simple terms it is a system of recording information. Like a digital ledger.
Whenever a new event or transaction takes place a new block of data – usually containing transaction details and a date and time stamp – is added to the chain. Due to its public and algorithmic nature, it is incredibly difficult to alter, hack, or cheat.
Many Indian investors and new-age entrepreneurs are looking for diversified methods to develop their wealth, and the cryptocurrency business is growing in popularity around the world. In the upcoming years, the new digital money is likely to become more mainstream in commercial activities.
Therefore, it makes complete sense to set up a crypto business in Dubai.
With additional free zones permitting enterprises to engage in crypto trading, crypto asset management, bitcoin trading, and associated activities, the UAE has become more mainstream.
Companies can trade and administer their digital currencies with a cryptocurrency business
Dubai Multi-Commodities Center (DMCC)
Dubai Airport Free Zone (DAFZA)
Cryptocurrencies are becoming increasingly popular in the Emirates, and there’s a lucrative opportunity to venture into the areas of cryptocurrency trading, holding, exchanges, and numerous other new business opportunities.
Indian new-age investors and global crypto enthusiasts can set up a crypto business in Dubai by following these steps:
Finalize Your Company’s Name
Choose the Preferred Jurisdiction
Register for a Cryptocurrency License
Abide by All the Compliance Regulations
1. Finalize Your Company’s Name
The first stage is to come up with a company name that’s free of profane words, or well-known trade names. In addition, it should be simple and memorable. Furthermore, you should use a person’s complete name (and not a nickname) if you want that as your business trademark.
2. Choose the Preferred Jurisdiction
Decide on whether you want to establish a crypto business in a Dubai-free zone or on the mainland. Note that you’ll have no currency constraints in the free zone. In addition, you can also enjoy the income and gain repatriation. On the other hand, a mainland establishment gives you hassle-free access to all the Emirates in the UAE.
3. Register for a Cryptocurrency License
You can register for a cryptocurrency license in Dubai, UAE once you’ve made the above considerations. Moreover, you can send this application directly to the concerned governing body. However, it becomes a bit hectic for an expatriate to manage so many things alone. Therefore, it’s better to collaborate with the crypto business experts at the Shuraa India branch.
4. Abide by All the Compliance Regulations
Bitcoin trading is supervised in the same way as traditional financial trades In Dubai. Therefore, you must have the appropriate license, and also follow anti-money laundering regulations. Any carelessness in this regard can lead to business repercussions.
Banned until this year, the use of digital currencies was approved by the Dubai government at the beginning of the year when the new Regulatory Framework for Stored Values and Electronic Payment Systems was enabled. According to this law, companies are allowed to accept digital payments which open the door to a new type of business venture: cryptocurrency companies.
Foreign investors who want to open blockchain or cryptocurrency companies in Dubai are encouraged by the UAE Central Bank and by the Dubai Supreme Legislation Committee which promotes the use of digital currency.
Our company incorporation agents in Dubai can offer more information on the legislation related to the use of cryptocurrency.
You need to meet all the established requirements to set up a crypto business in Dubai. These include:
The “UAE financial free zone” divisions should be integrated with all crypto assets.
Ensure that your capital resources alongside any other operating expenses are accessible for at least six to twelve months.
.There are no fraudulent transactional operations permitted, and a perfect track record is essential.
Make certain that your data is safe in the crypto wallet.
Include copies of all of your business partners’ valid passports.
Submit a commercial license form to the preferred crypto administrative authority.
You can enjoy several benefits after setting up a cryptocurrency business in Dubai. We discuss some of these advantages below:
1. Brand’s Standout Feature
Businesses that accept cryptocurrencies are always in the spotlight. You immediately set yourself apart from the competition by announcing that your company takes cryptocurrency. Moreover, Bitcoin has a passionate user base. This segment will be excited to promote and buy from a company that isn’t afraid to experiment with new payment methods.
2. Low Transactional Expenses
Cryptocurrency lowers a company’s running costs significantly. Cryptocurrency payments do not have a service fee. Therefore, this makes it a particularly advantageous transaction method for companies in Dubai.
Furthermore, transactions are global and conducted in near real-time, irrespective of the sender’s and recipient’s geographical locations. Therefore, crypto transfers are significantly cheaper than other transactions, thanks to the absence of cross-border barriers.
3. Enhanced Security
The expansion of the digital business world has been fueled by credit cards. In addition, credit cards have allowed online businesses to communicate with customers wherever they are by allowing them to conduct transactions without having to be physically there. Due to the irreversibility of crypto transactions, they create a sense of security while making international payments.
4. Comprehending Blockchain
The popularity of cryptocurrencies has only grown. Moreover, blockchain technology will potentially become popular if the current trends persist. Therefore, as with any rising phenomenon, early entrants will have a major edge over those who arrive later.
5. Data Confidentiality
Every year, news of a big corporation’s breach of client data makes headlines around the globe. Customers are vulnerable to identity fraud and, subsequently, the compromise of their hard-earned wealth as a consequence of the lack of personally identifiable data.
The UAE has aimed to become a pioneer in business and industries and also has a view on the cryptocurrency industry. With the rising curiosity in cryptocurrency investments, the trade and business in this industry are also taking pace in Dubai, UAE. Following are some of the major highlights of UAE’s cryptocurrency landscape:
UAE has recently introduced the “Blockchain Strategy 2021” which aims to help foreign entrepreneurs pursue trade and business in this industry. Within this, 50% of government transactions are projected to be conducted using blockchain technology.
The Financial Services Regulatory Authority (FSRA), the financial regulator of Abu Dhabi Global Markets (ADGM) has become the first regulator in the UAE to issue comprehensive guidance and regulations on carrying out cryptocurrency trade.
Currently, there are more than 400 crypto businesses operating in the UAE. This number is expected to grow to 1000 by the year 2022, considering UAE is accelerating its efforts to boost the digital economy.
The frameworks of the Free Zones of Dubai and Abu Dhabi encourage entrepreneurs in the crypto space to set up exchanges while laying out rules for ethical trade and protecting consumers.
The DMCC Crypto Center that was launched in May ’21 is heavily promoting cryptographic and blockchain technologies in Dubai. This center is home to over 100 organizations in the crypto space, with approximately 900 more having applied for the license.
The UAE has introduced favorable measures to boost digital assets trading and rising interests. In September’21, the Securities and Commodities authority signed a deal with Dubai World Trade Center (DWTC) authority to support the trading of crypto assets. Dubai also hosted its first Crypto Expo, which soared the crypto assets in the region.
The requirements to get a cryptocurrency license in Dubai are as follows:
Obtain a commercial license from Dubai Multi-Commodities Centre (DMCC)
Copy of the passport of all the partners in the business
A completely clean crypto wallet record with no fraudulent transactions or activities
All operational expenses and capital resources should be visible for 6 to 12 months of operation
All crypto-assets should be incorporated with ‘UAE Financial Free Zone’ departments approved by the government
Provide a proper business plan along with a cryptocurrency license in Dubai
Download and fill-up the cryptocurrency license form from the respective authority of the place you want to set up your company in
Attach and submit the cryptocurrency license form with the company’s and all shareholders names
Submit all required documents to the respective authority where you are setting up your company
Complete the payment to the respective authority that provides a cryptocurrency license to you
If all are checked out with the application form and official company documents, then the authority will provide the cryptocurrency business license within a week of approval
In UAE, depending on the market capitalization, traceability, price volatility, etc., the Crypto Currencies are allowed for the trading subject to certain regulations.
For the crypto companies to secure the crypto license:
There must be enough capital to operate the business for at least 6 months successfully.
A strict KYC Norm has to be adhered
Disclosure to Value-Added-tax, Anti-Money laundering, and other Government authorities on request must be fulfilled
Secured information of client’s financial information – safeguarding against cybersecurity
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