In a move to tighten oversight of cryptocurrency and digital assets as their usage expands, the UAE central bank on Wednesday issued guidelines related to virtual assets to combat their use in money laundering and the financing of terrorism (AML/CFT).
The new guidance discusses the risks arising from dealing with virtual assets and virtual asset service providers. The guidance describes various channels and mechanisms of interaction between licensed financial institutions (LFIs), including banks, and virtual asset service providers.
The guidance will come into effect within one month, the central bank said in a statement.
Virtual assets include assets commonly referred to as cryptocurrencies, cryptocoins, payment tokens, exchange tokens, and convertible virtual currencies.
In February this year, Dubai’s Virtual Asset Regulatory Authority (VARA) outlined a new virtual asset framework designed to make participants to adhere to AML standards.
(Writing by Brinda Darasha; editing by Imogen Lillywhite)