Crypto and blockchain lawyer Irina Heaver has raised concerns about newly-released regulations in the United Arab Emirates (UAE) that she believes may prohibit crypto payments in the country. The regulations, approved by the board of directors of the Central Bank of the UAE as part of the country’s financial infrastructure program, aim to oversee and license stablecoins, with a requirement that payment tokens must be backed by UAE dirhams and cannot be linked to other currencies.
Heaver warns that these new rules effectively ban crypto payments within the UAE, as they only allow for licensed dirham payment tokens or registered foreign payment tokens, neither of which currently exist. She argues that this move contradicts the country’s historically pro-commerce and pro-investment stance, which has attracted foreign direct investment due to its liberal policies.
The lawyer also expressed concerns about the impact of these regulations on the UAE’s economic principles and foreign investment inflow. She highlighted the role of stablecoins like Tether (USDT) in facilitating transactions in the crypto industry, and believes that prohibiting their use could hinder the sector’s progress and the country’s ambitions in the digital economy.
Heaver also pointed out that the UAE lacks strong industry representation, unlike countries like Switzerland with associations like the Crypto Valley Association that advocate for the interests of the crypto industry. She emphasized the need for a united voice in the UAE’s Web3 and crypto sector to counter policies that may be detrimental to its growth.
As the UAE navigates these new regulations, the future of crypto payments in the country remains uncertain, with potential implications for its digital economy and attractiveness to foreign investors.